Providing Quality, Affordable Durable Medical Equipment for Beneficiaries

By Sean Cavanaugh, CMS Deputy Administrator and Director, Center for Medicare

Traditionally, Medicare pays for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) using a fee schedule that is based on historic supplier charges from the 1980s.  Numerous studies from the Department of Health and Human Services Office of Inspector General and the Government Accountability Office have shown these fee schedule prices to be excessive and that taxpayers and Medicare beneficiaries bear the burden of these high payments. CMS has worked for many years to improve how Medicare pays for DMEPOS items with the goal of ensuring that people with Medicare get the equipment they need while reducing costs for beneficiaries and taxpayers.

Since 2011, we have operated the DMEPOS competitive bidding program to set payment amounts for covered DMEPOS items in certain areas in the country. The Program has saved more than $580 million in nine markets at the end of the Round 1 Rebid’s three-year contract period (January 1, 2011 through December 31, 2013). And, after the first two years of Round 2 and the national mail-order programs (July 1, 2013 – June 30, 2015), Medicare has saved approximately $3.6 billion. Health monitoring data indicate that its implementation is going smoothly with few inquiries or complaints and no negative impact on beneficiary health outcomes.   By all measures, the DMEPOS competitive bidding program has been a great success for beneficiaries and taxpayers.

At the beginning of this year, in compliance with statute, we phased in new rates in non-competitive bidding areas based on information from the DMEPOS competitive bidding program. We phased in these new rates with a blend of 50 percent of the unadjusted payment rates and 50 percent of the adjusted payment rates on January 1, 2016.  We are also using the same real-time monitoring system we use in competitive bidding areas to ensure beneficiaries are receiving the equipment they need.  This data monitoring tracks access to items and services and a number of clinical outcome measures such as mortality, hospitalizations, and emergency room visits.

Today, we posted monitoring data that shows our efforts succeeded in saving the Medicare program money while continuing to provide equipment to those who need it. The data reveals that suppliers in these non-competitive bidding areas have continued to accept the new, adjusted DMEPOS payment rates as payment in full. If the new, lower fee schedule amounts do not cover the suppliers’ costs, these suppliers could require beneficiaries to pay the difference between the new and old rates. But according to the data, barely any of them did so. This suggests that the adjusted fee schedule rates continue to be more than adequate to cover the costs of furnishing the DMEPOS items in all areas.

Overall, there has been no change in the percentage of claims for which suppliers are accepting the new payment rates as payment in full.  For the first four months in 2016, suppliers accepted the new rates as payment in full for 99.88 percent of the claims submitted, compared to 99.87 percent for the first four months in 2015. The rate of acceptance remained at 99.90 percent for items furnished in rural areas in 2016, while the rate of acceptance in non-contiguous areas changed only slightly in 2016 (99.81 percent) compared to 2015 (99.90 percent).

The data are broken out for eight geographic regions of the contiguous United States, as well as non-contiguous areas (i.e., Alaska, Hawaii, Puerto Rico, Virgin Islands, etc., combined). It also compares the rate of assignment of claims for DMEPOS items furnished in rural areas versus non-rural areas. The rate of assignment of claims in 2016 continues to be very high overall in both rural and non-rural areas. Finally, the data is broken out for several different categories of DMEPOS items. The monitoring data are available at:

We expect to post additional data on assignment rates, access to items and services, and health outcomes in the near future.

Based on our monitoring efforts, and the continued high voluntary acceptance of assignment across all non-competitive bidding areas, including rural areas and non-contiguous areas, we believe that the partially adjusted fees implemented in January have had no negative impact on beneficiary access to quality items and services. We will continue to monitor all data very closely leading up to and following implementation of the phase in of the fully adjusted DMEPOS fee schedule adjustments on July 1, 2016.

Round One Health Care Innovation Awards Show Some Promising Results

By: Dr. Patrick Conway, CMS Principal Deputy Administrator and Chief Medical Officer

The Health Care Innovation Awards is a Centers for Medicare & Medicaid Services (CMS) Innovation Center initiative that tests new payment and service delivery models and aims to find better ways to deliver care and bring down costs for Medicare, Medicaid, and/or Children’s Health Insurance Program (CHIP) enrollees. Today we are sharing the second annual independent evaluation reports of round one of the Health Care Innovation Awards. Overall, these evaluation reports show a wide range of experiences that have resulted in tangible benefits for patients and helped inform CMS in the development of new payment and service delivery models.

Where data are available, these reports describe preliminary impact estimates on key outcome measures such as hospitalizations and readmissions. A number of awardees showed favorable results on one or more measures of cost, hospitalizations, readmissions, and emergency room visits. Here are some early highlights of a few of the awards:

  • Innovative Oncology Business Solutions, Inc. – through its Community Oncology Medical Home – reached more than 2,100 cancer patients through seven community oncology practices across the United States. Through comprehensive and coordinated oncology care, the model established pathways that:
    • allowed providers to identify and manage symptoms in real time;
    • improved patient access to providers through same-day appointments and extended night and weekend office hours; and
    • provided disease management guidance for providers to improve treatment decision-making, symptom recognition, and assistance with patients’ self care, pain management, and caregiver support.

The evaluation report shows that this award demonstrated a significant reduction in hospital readmissions and emergency room visits. In addition, qualitative findings suggest that staff highly value the triage pathways for making their workflow more efficient, and patients greatly appreciate weekend hours and increased capacity for urgent care visits during the day. Elements of this model were incorporated into the design of the Oncology Care Model.

  • The High-Risk Children’s Clinic at the University of Texas Health Science Center at Houston’s (HRCC) offered dedicated outpatient services (primary, specialty, post-acute, chronic disease management) and around-the-clock phone access for extremely fragile and complex chronically ill children enrolled in Medicaid. Every family in the HRCC has an assigned clinician who involves the parent in all health assessments, empowering parents as experts in their child’s health condition and educating families on exacerbating symptoms. The evaluation found that the program significantly reduced emergency department visits and hospital admissions, which drove savings in medical and hospital cost of care for participating children. In addition, the report finds that the patient and family centered approach appears to have resulted in improved patient and family caregiver experience.
  • Welvie is a program that offers education, health information, and decision-making resources regarding preference-sensitive surgeries to Medicare beneficiaries. Welvie conducts regularly scheduled, population-based outreach well before treatment decisions need to be made. Program administrators also review regional health care utilization patterns and mail outreach materials to arrive before periods of increased surgery utilization so that beneficiaries can recall and access the resources when needed. The program has enrolled over 181,000 beneficiaries in Ohio and almost 54,000 beneficiaries in Texas. Enrollees in Ohio had a statistically significant decrease in mortality as well as indications of a reduction in hospital readmissions following surgery-related hospital admissions for the Medicare FFS beneficiaries. The program was also associated with reductions in various surgery-related categories of expenditures among Medicare Advantage beneficiaries.

Diabetes Prevention Program

We recently announced that a round one Health Care Innovation Awards project — the Diabetes Prevention Program – is eligible for expansion under Medicare. The National Council of Young Men’s Christian Associations of the United States of America (Y-USA) enrolled eligible Medicare beneficiaries at high risk for diabetes in a program that could decrease their risk for developing serious diabetes-related illnesses. Beneficiaries in the program attended weekly meetings with a lifestyle coach who trained participants in strategies for long-term dietary change, increased physical activity, and behavior changes to control their weight and decrease their risk of type 2 diabetes. After the initial weekly training sessions, participants could attend monthly follow-up meetings to help maintain healthy behaviors. The main goal of the program was to improve participants’ health through improved nutrition and physical activity, targeting at least a five percent weight loss for each individual.

The independent CMS Office of the Actuary certified that expansion of the Diabetes Prevention Program would reduce net Medicare spending. The expansion was also determined to improve the quality of patient care without limiting coverage or benefits. This is the first time that a preventive service model from the CMS Innovation Center has become eligible for expansion into the Medicare program.

Health Care Innovation Awards Background

In July 2012, the CMS Innovation Center awarded 107 cooperative agreements through round one of the Health Care Innovation Awards to implement the most compelling ideas that aimed to deliver better care while spending health care dollars more wisely. Up to $1 billion were awarded to organizations that tested projects across the country that worked to achieve better quality of care and save money for people enrolled in Medicare, Medicaid and the Children’s Health Insurance Program. The evaluation reports are divided into large topical areas:

  • Behavioral health and substance abuse;
  • Complex and high risk patient targeting;
  • Community resource planning and prevention;
  • Disease specific;
  • Hospital interventions;
  • Primary care redesign; and
  • Shared decision making/medication management

The first annual evaluation reports were released in April 2015 and provided qualitative findings largely focusing on the implementation experience covering the period from the award date through summer 2014. The reports released today synthesize findings from additional rounds of interviews and site visits conducted from the award date through summer 2015, preliminary estimates of impacts on four core measures (cost, hospitalizations, readmissions, emergency room visits) depending on the intervention and data availability, and results from select surveys of providers focusing on workforce and primary care.

While the results of the awards are wide-ranging, the evaluation of round one of the Health Care Innovation Awards is still ongoing and future reports will add to the current results. There is still much to learn, and we hope that other public and private entities will continue to invest in initiatives and efforts that improve the health care system in this country.

For more information on round one of the Health Care Innovation Awards and to view the second annual evaluation reports, please visit:

Medicaid: Keeping Moms Healthy

By: Patrick Conway, M.D., Principal Deputy Administrator and CMS Chief Medical Officer and Vikki Wachino CMS Deputy Administrator and Director for the Center for Medicaid and CHIP Services (CMCS)

More than any other health insurance program, Medicaid plays a key role in promoting the health of new mothers. Covering roughly half of births, Medicaid is there for new moms and their babies right from the beginning. We’re excited to showcase two ways that Medicaid can help get new moms and their babies off to the best possible start.

Help at the Right Time

Welcoming a new baby into the family is typically a time of great joy. But for some mothers it can also be a time in which they experience the “baby blues,” or in more serious cases, postpartum depression. Maybe you or someone you know has struggled with feelings of depression, detachment or even fear after the birth of a child.

Maternal depression presents a significant early risk to proper child development, the mother-infant bond, and the family. Children raised by clinically depressed mothers may perform lower on cognitive, emotional and behavioral assessments than children of non-depressed caregivers, and are at risk for later mental health problems, social adjustment difficulties, and difficulties in school. That’s why screening for and treating maternal depression is such an important tool to help prevent these adverse effects on a child’s development.

This is where Medicaid can help. Medicaid covers maternal depression screenings for mothers of Medicaid-eligible children performed by a pediatrician, often as part of a well-child exam, helping moms and their babies get the care they need.

For example, Colorado, Illinois, North Dakota and Virginia are helping moms get these screenings by making it easier for providers, including pediatricians, to have the tools they need to conduct the screenings and bill Medicaid appropriately. Making sure pediatricians have the tools they need is key, as they not only play a pivotal role in assessing the health and wellbeing of both moms and their babies, but may also be the health care practitioner most often interacting with a new mother.

Screenings represent a valuable opportunity for timely identification of issues; they are also a pathway to effective treatment. Based on the results of her screening, the pediatrician can refer the mother to diagnostic and treatment services as part of her needed follow-up care, which Medicaid will cover if she’s eligible for and enrolled in the program.

Today’s Informational Bulletin describes how Medicaid can pay for services that are for the direct benefit of the child, but that may also include the mother. 

Helping Families with Home Visitation

Home visiting programs are another way to get new moms and babies off to a great start in life. Home visiting programs do much more than simply promote health – they encourage positive parenting, promote school readiness, and prevent child abuse and neglect.

While not part of today’s Informational Bulletin, combining maternal depression screenings and treatment with home visitation programs is a winning combination. That’s why we wanted to highlight the Federal Home Visiting Program guidance we released in March in partnership with the Health Resources and Services Administration (HRSA).

This guidance includes examples of how states can design a home visitation program for pregnant women and families with young children, and walks through the typical components of such programs, such as developmental and social screenings for both moms and their babies, case management and referrals to needed treatments, and the provision of activities including family support and counseling services and parent/caregiver skills training. These home visitation programs keep moms and their babies at the heart of delivering effective, efficient and quality care.

In addition, our work with HRSA closely aligns with another way Medicaid supports the health of moms and their babies: Medicaid’s Maternal and Infant Health Initiative. This initiative focuses on increasing the rate and content of postpartum visits, as well as increasing the rate of intended pregnancies through the use of effective contraception. Last month, we released an Informational Bulletin describing how states can knock down barriers for women, including new moms, in accessing effective contraception, which has been shown to help reduce the risk of low-weight and/or premature birth while helping a woman’s physical and emotional well-being.

Together, these guidance documents provide information that we hope will be helpful to states, providers, advocates and beneficiaries in understanding the resources that are available to give families the best start possible.

Acting Administrator Slavitt Speech at Datapalooza

Below are the prepared remarks of CMS Acting Administrator Andy Slavitt at Datapalooza on May 10, 2016. Follow Andy on Twitter, @aslavitt. 

There’s a bit of a checklist for speaking at Datapalooza. Thank Niall. Mention Todd Park. Remark at how big the event has gotten compared to last year. Recap how much progress has been made. Refer to yourself as a “data geek” . Also, have in my notes “Good not to follow Farzad or Aneesh” . Perhaps even make some news with an announcement or grant or contest. Several of my colleagues did this and I share their excitement.

But I’m not going to make news. Instead, I’m going to relay a bit of my personal experience with health care innovation and technology as my goal is to leave this job with nothing really left unsaid. Twitter, by the way, seems to be helping with that.

Lately, we’ve been contemplating a significant transformation of the Medicare program by implementing the bi-partisan MACRA legislation. Legislation to make a wholesale change in the Medicare payment system to pay for quality. This has caused me to begin an obsession with the plight of independent physicians, knowing as we all do that if we don’t invest in primary care, we’ll invest double or triple when people get unnecessarily sick. And as a steward of programs where people with the lowest incomes and in the most remote locations get care, I know that without access, it will be people that can afford it the least that suffer first and most.

Starting in January, we began an unprecedented effort to engage and listen to physicians and patients and close the gap between policy-making and front line care. We had more than 6,000 conversations with physicians, with patients, with innovators in local communities, in their office, in focus groups and in workshops — collecting stories and seeking criticism we could act on. I’ve listened to a number of stories of doctors who feel burned out and eager to retire, but who hang in there only for their patients.

We have had extraordinary learnings. Learnings that come only when you spend months and months listening to thousands of physicians, patients and other clinicians all over the country. With many hours of observations, what became clear was that the combination of technology, regulation and measurement took time away from patients and provided nothing or little back in return. Among other things, physicians are baffled by what feels like the “physician data paradox.” They are overloaded on data entry and yet rampantly under-informed. And physicians don’t understand why their computer at work doesn’t allow them to track what happens when they refer a patient to a specialist when their computer at home connects them everywhere.

Through these conversations, one thing became very clear. As we move to a system based on quality measurement, we need to radically simplify and support physicians and patients with technology that works for them. What we call “interoperability” at this point would not be considered an impressive achievement by physicians. At best, it would count as making the technology work. A specialist in Chicago told us, “I think that the one thing that this really could’ve added to patient care is the one thing that hasn’t happened. The systems don’t talk to each other. It’s actually the opposite. With one of the EMRs I used, I can’t even access it at the hospital because of the firewall. I can’t even get into the EMR at the hospital to look at patient records.”

Discouraging? I have a hopeful experience with technology that started out . . . discouraging.

I arrived in Washington two-and-a-half years ago and the occasion for my arrival was that technology was putting national health reform at risk. Health reform that we had waited so long for. Tens of millions of Americans needed health coverage and we waited for the technology of to deliver. Once again, technology was the problem.

Until it wasn’t. After a while, except for some aftermath stories, you never heard about the technology again and next thing you know, we had 20 million new people covered with health insurance.

What you didn’t hear was that within months after we had technology functioning, for the first time across the country, we were using technology to do things that had never been done before and redefining the very value proposition of health insurance.

  • Using complex analytics, and a real time data hub, we were signing people up for coverage in real time when up until then, in Medicaid, for example families and children had to wait months to find out if they were even eligible.
  • By last year, technology had redefined the way health care is offered and purchased in America. The easy comparison of plans has brought down prices and created more service offerings. People who shopped and switched plans saved an average of $500/month and many “direct services” are now offered outside of a deductible to lure consumers.
  • And consumers changed the way they shopped. On a daily basis, gov crawls the websites of all the health plans for their provider directories and formularies. So instead of looking for a health plan, consumer can search for a prescriptions drug they needed or a doctor or hospital they want to see and the technology will match them with a plan.
  • Last year, in a single day, we watched as 500,000 people, many using mobile devices, signed up for coverage.

Health insurance costs less and offers more services because information was put to work for people. Just like it has in so many areas of people’s lives, like buying a car or getting same day shipping, technology has made our lives better and made a system work better.

What was responsible for the shift? A relentless focus on getting the customer what they wanted and making it a clear national focus. 

I relay this as I stand here today with eight-and-a-half months left in Washington because I can’t help but reflect on the parallel set of circumstances as it relates to technology and innovation in care delivery. Like the major change we went through as we improved access to coverage, we are now on the cusp of an equally transformative change in quality and affordability– paying physicians and hospitals for providing the right care. Yet now, while technology supports us in getting coverage, it is failing us in the care experience.

Health care is actually full of the same tasks over and over– getting a referral, getting discharged from a hospital, scheduling a follow up appointment. Yet the system treats us as if we’re doing everything for the first time and seems remarkably surprised by our activities. Robots can perform your mom’s surgery. But reminding her to fill her prescription? No! Telling her primary care doc how the surgery went and arranging a follow up? Seems to be too hard.

And guess what we know: all those things that happen to her after the surgery can be just as important as what happens during the surgery. Technology isn’t doing the things we know it can– help us make smarter decisions, reduce our wasted time, help us communicate or understand what to expect next.

I have the same feeling we faced two-and-a-half years ago as we turned around Physicians may be more skeptical now about the promise of IT than anyone was at that time. But just as we did then, we must re-focus on our customer and we must rise above our proprietary interests to make this a national priority. Having seen it happen, I know we can get this right.

So what are we doing about it?

This leads back to the MACRA implementation and the opportunity it gave us to re-think Meaningful Use. We may have surprised people with the changes we began to discuss, but it wasn’t discouragement, but confidence, that caused us to make this move. Confidence that if we worked closely with patients, clinicians, and the private sector, we could change the focus from payments and measurements and programs and a fragmented experience back to supporting patient-centered care. We committed to taking a page out of the consumer technology playbook and taking a user-centered approach to designing policy.

What we learned in all of our listening reinforces our effort around five significant strategic steps we have been undertaking:

  1. The massive, unprecedented release of data which this conference has been all about.
  2. Changing incentives through the CMS Innovation Center to pay physicians and hospitals more for practicing quality and coordinating care.
  3. The creation of a single set of “core” quality measures across all payers so physicians can just do it one way for all their patients.
  4. Advancing interoperability, requiring Open APIs and exposing data blocking practices so data can follow a patient and new apps can become plug and play.
  5. And, a proposed replacement of Meaningful Use and streamlining of quality measures to put the needs of the users — clinicians and patients — back in the center.

These steps are designed to make it easier for you to innovate, to open up competition, and to move the focus from designing around regulations to allowing you to design around patients and physician’s needs. So, as I speak here for the final time as the CMS Administrator, the opportunity for you to transform health care into an information industry has never been more ripe… or more urgent. No new inventions needed. Just three things I ask you to think about.

  1. Take stock of where you are in history. 

It’s time to think bigger. If it’s true that change breeds opportunity, as we implement MACRA to fully change Medicare payments to pay for quality, we are in the midst of the biggest change in our health care system since the 1960s and the beginnings of Medicare and Medicaid. Twenty million new people are accessing coverage; a boom generation is turning 70 and the 85+ generation is set to double in the next few years, taxing families and the system like never before. The affordability of health care and prescription drugs in specific is a top-tier issue for consumers by almost any study. And disaffection among physicians is significant, overloaded by change, lacking in support and fearful that their profession and independence is under assault.

For all of these macro changes, very little technology has yet to be created to make this change work. In short, it’s the perfect time to be an innovator. You can help change the course of history. We must learn how to take care of people better in their own homes and communities. We need to empower physicians so that technology improves their morale, not saps it. An entirely new operating system for health care will be needed to support it.

  1. Second, find those out-ahead physicians that can define the needs for everyone else.

I sat down with a physician from Vanguard Medical Group, a primary care practice in New Jersey to listen to input on the roll out of the Quality Payment Program. Dr. McCarrick told me that since his practice became a medical home and was given the incentives and freedom to take care of patients the way they wanted to, his office has exploded with innovation. He told me that now that payments have caught up with the way they wanted to practice medicine, he can focus entirely on caring for his patients. He’s found new ways to reach his aging and increasingly lonely and isolated patients. He’s creating Skype “villages” for elder, disabled, homebound patients so they can now not only talk to their physician once a week, but their sister across the country, their granddaughter in college, and other people in their same situation.

Dr. Bevill in rural Arkansas, who is also an early participant in a payment model rolling out now across the country, told me that unlike most physicians he talks to, he has figured out how technology can help him spend more time with patients when they visit. All his patients are risk stratified and a care coordinator leaves an iPad in the exam room displaying everything he needs to know on it, including all prevention and screening recommendations. He says he leaves it lying flat so it doesn’t get in the way of the conversation with the patient.

These physicians that are already in medical home models and bundles are at the leading edge of a huge wave. Already roughly 11 million patients are in a Medicare ACO. We’ve just launched the largest medical home model in history. As of April, approximately half of all hip and knee replacements are being paid for in a bundled payment requiring inpatient and outpatient collaboration. And next year, as the new Quality Payment Program that is introduced by MACRA, every Medicare physician will be in a program that rewards quality and coordinated care in some form.

Physicians don’t need to get “pushed” into using technology with incentives to show they’re clicking. They are “pulled” in because they need collaboration tools. The purpose of new payment models is to give care providers the freedom to do what they think is right. Your opportunity is to allow it to happen. Go find them and talk to them– design for them.

  1. Finally, with respect to some important business practices: it’s time to lead, follow or get out of the way.

At CMS we oversee the care needs of 140 million Americans in Medicare, Medicaid, CHIP and Marketplace plans. When you microscope their lives, almost all have moderate or fixed incomes and face a fragmented, mystifying health care system at their most vulnerable time– finding a nursing home for a parent, waiting on a biopsy, traveling by bus to a dialysis center, caring for a child with a disability. All of the handoff points are where the avoidable complications kick in.

If you want to lead the way with innovations that help consumers, great.

If you want to follow by using established standards for data and measurement and technology, also great.

If you have a business model which relies on silo-ing data, not using standards, or not allowing data to follow the needs of patients, pick a new business model or pick a new business. What Vice President Biden said should stick with us– as taxpayers, we did not spend $35 billion so companies could build their own silos.

There are a set of patient-friendly business practices everyone should follow:

  • Eliminate language from contracts that slows down the ability of the system to plug and play.
  • Make all your data machine readable and put it on an edge server so it can be securely and easily called to answer questions.
  • Provide physicians with data on their patients in real time and with feeds into their workflow, not your portal.
  • Use open APIs to be sure your technology is plug and play and with that, break the lock that early EHR decisions have placed on the physician desktop.

At this stage, there is no room for business practices that don’t match the need of patients.

Without better connected and easier to use technology, I worry most about the people with the least access to care. I worry about the independent physician practice. I worry about our country’s Cancer Moonshot. But mostly I worry that the moral underpinnings of our public-private health care system won’t support where we need to go. And that will mean our chances of any meaningful success will be held up, not because we can’t do it, but because we won’t do it.

When we put our minds to it, I have seen how much technology can radically improve health care and how fast. MACRA is the burning platform for progress in care delivery, just as the ACA was in health care coverage. Together, we can make the system radically better.

My job, like all of yours is filled with moments. Moments of human interaction that stand out. Some have snapped me to attention and action, like the time I spent at a dialysis center with people whose kidneys were slowly failing. Or when I met with Denis Heaphy, a young man living with disabilities in Boston, but who flew down to meet with me in D.C. because there was something I could do to help make sure he could continue to live independently. Letters from people whose lives were saved because they got insurance for the first time.

I had a moment last week that I will always remember, especially with my drive to simplify for medical practices. It was the last few minutes I spent with Dr. Bevill from Sama Healthcare in Arkansas– the one with the iPad and the focus on prevention. He showed me a photo of the entire office staff who wear t-shirts that say “Team Sama” and patients coming in to see him who say “the atmosphere feels electric.” Then he leaned over and confessed to me that his partner had been planning to retire, but now that he was free to practice medicine, he plans to practice until at least 70. As I looked at the picture, I noticed a quote from the Sama practice manager Pete Atkinson that made it all make sense in a way I know Vice President Biden will appreciate. It’s simple– “We find a stage 1 cancer rather than a stage 3 cancer.”

Let’s go help everyone do that.

Improving the Marketplace through Innovation

By: Kevin Counihan, CEO of the Health Insurance Marketplace

The Health Insurance Marketplace has become a reliable source of health insurance coverage for millions of Americans, many of whom used to be locked out of coverage because it was either unaffordable or because of a preexisting condition. Thanks to the combination of the Health Insurance Marketplace, expanded Medicaid, and other provisions of the Affordable Care Act, the share of Americans without health insurance has fallen to the lowest it’s ever been.

The Marketplace continues to deliver on its promise to offer consumers a place to find affordable coverage that meets their needs. Now in its third year of operation, the Health Insurance Marketplace is a dynamic platform that allows consumers to compare plans not only on premium price, but also on other plan features like the size of the deductible and whether a consumer’s doctors, hospitals, and prescription medications are covered.

However, the Marketplace is still very young. Just four years ago, the individual market still relied on a business model of denying coverage to those most likely to need it, imposing limits and carve-outs on covered services, and capping insurance coverage well short of what a serious illness can cost. Thanks to the market reforms and financial assistance in the Affordable Care Act, the individual market now looks very different. Today, any consumer can buy any plan, and insurers compete based on the quality and cost-effectiveness of their products, instead of on how well they select their customers.

Everyone expected that it would take time for companies to adjust their pricing and practices to what is effectively a new market. And it’s also no surprise that the pace of adaptation has varied across issuers. Some companies have struggled so far in this new market, while others are already succeeding in providing affordable care through a sustainable business model.

The success stories come from all across the country and from diverse types of insurers and markets. But one theme that’s consistent is that success in the Marketplace requires a different approach to providing care than was required for success in the old individual market.

We are inviting health plans and issuers that have found particular success in serving the new population to present their insights and innovations at a forum on June 9th. At the forum, presenters will describe strategies around consumer engagement, provider contracting, and care coordination models tailored by population data. And everyone (including issuers Aetna, BCBS of Florida, BCBS of Massachusetts, CareSource, Horizon BCBS, SelectHealth, UPMC, and the Society of Actuaries) will have the opportunity to discuss novel techniques that may help companies offer better health care coverage at lower cost.

We’re excited to bring together national leaders within the Marketplace to discuss innovative strategies for providing private health insurance coverage. The issuers who will join our conference have diverse characteristics. They are each successful in the Marketplace, but represent plans that are big and small, are commercial and non-profit, and hail from around the country.

This discussion will also help us work together towards a vibrant Marketplace that drives high-value, high-quality health care. Whether you are a patient, a provider, a business, a health plan, or a taxpayer, the long-term stability of the Marketplace is in everyone’s interest – both families who need access to quality, affordable coverage they can count on, and companies that have a chance to expand into a new market with millions of consumers.

I look forward to our conversations about how to continue to support a competitive Marketplace that rewards better, smarter care. If you’d like to join our conversation on June 9, please watch a live stream at .

Acting Administrator Slavitt Speech at the American Hospital Association’s Annual Membership Meeting

Acting Administrator Slavitt Speech at the American Hospital Association’s Annual Membership Meeting

Below are the prepared remarks of CMS Acting Administrator Andy Slavitt before the American Hospital Association’s annual membership meeting on May 3, 2016, @aslavitt.

Good morning. I want to thank you for having me here on what looks to be great agenda. I want to publicly acknowledge Rich for the many years of service, straight talk and advocacy. And I want to personally thank Rick for you leadership and partnership as we both began these jobs around the same time. We’re both taken this on at an interesting time.

There is so much going on in health care. Change of every type – new consumers entering the system, changing payment models, advancing technology, issues of real challenge to rural hospitals, consolidation of all types – that it’s hard to keep track of it all. Even our roles are changing – as hospitals and physicians take risk for populations and the relationship with the patient changes and extends beyond traditional boundaries.

You’re right in the center of it. So we need to communicate about our progress and yours, our goals and yours and I’ll pick out some of the salient issues this morning so you know where CMS is heading and you can be better informed about what we need to hear from you.

I hope you take away three things-

First, as I’m sure you probably heard from Denis already this morning, I want to express our gratitude for the partnership we have built as we work together to serve the American public.

Second, I hope you hear and see increased clarity and transparency on our part. You shouldn’t have to guess where we’re headed or what’s important to us. We want to create as much consistency and predictability as possible.

And third, that you view our role not simply as a policy maker, a regulator or a payer, but as an ally in helping you thrive through all this change – thrive at delivering quality care, thrive in adapting your hospitals to the emerging needs, and thrive in meeting a collective set of challenges that are endemic to our health care system and that we all need to meet head on.

We’ve made significant progress as a nation since the passage of the ACA. Six years ago, prior to the ACA, we should all remember, our health care system was stuck in a repetitive loop. 16% uninsured rate, quality not improving, costs skyrocketing. Every year. Every year we would all go to conferences to discuss and bemoan this. We’d attend the same conferences the following year. Same issues, same result. The ACA laid the groundwork for us to make gains in access to care, quality and affordability.

First, 20 million Americans have gained coverage since the start of the ACA. The uninsured rate is now below 10%. And if states that haven’t done so, expanding Medicaid will allow millions more to have the security of coverage. When people have insurance, their lives change in profound ways– from being able to access preventive care to being able to afford the prescription drugs for their chronic conditions. And there of course have been the economic effects – like reducing uncompensated care and hospital bad debt to the tune of billions of dollars.

Second, at the same time, the quality and safety of care has improved more significantly than ever before. Since the ACA has allowed us to begin rewarding for higher quality outcomes, unnecessary hospital admissions are down, 95% of quality metrics have improved nationally and hospital safety has improved by 17%, saving 87,000 lives in the process.

Third, medical cost trends are rising at their lowest level in 50 years, closely paralleling broader inflation measures, and running about half the level prior to the ACA. Affordability is paramount as we seek to cover people with pre-existing conditions, people with hourly and seasonal jobs, and new immigrant communities.

I’m not suggesting that the law, or any law, is a silver bullet. Rather, that if we implement and execute skillfully, with changes we know are good for patients, we make real progress. I know how challenging it is on a day-to-day basis – evolving our business models, changing how we collaborate and coordinate care in a community, reducing unnecessary costs and waste. But because of all your effort, we have made considerable progress over the last six years.

All of this is a good start. We have more to do to sustain and advance the progress to the point where people feel the system work better for them. Community by community, patient by patient, we need to address challenges not just to bend a curve, but frankly to break the mold of our silos, of waste we can see but is challenging to reduce, and of making sure that every American can afford to access to their medications, to the part of the system that keeps them healthy, and to the critical care that we will all inevitably need someday. Americans say health care costs are their number one financial concern so I will start there.

The Consumer

If you want to understand what defines and drives CMS, it’s as simple as this – the care and well-being of 140 million Americans in the Medicare, Medicaid, Children’s Health Insurance and Marketplace programs and the millions more who will need these programs someday. Defining how we make progress together begins with a better understanding of this consumer, most on fixed or modest incomes, who are more diverse, more mobile, more demanding and much more sensitive to the cost of care than ever before.

  • They are Medicare patients leaving the hospital with five prescriptions to fill but unsure how to pay for them. We know keeping them at home will depend on the quality of the transition they make to their own doctor and with their medication;
  • They are daughters and sons who have to make the difficult decisions on how to care for their parents who are losing their independence and need more and more assistance. They want to understand their options for both home and institutional care and how quality, staffing, cultural commitment and budgets will keep their parents healthy and independent for as long as possible;
  • They are parents with children with disabilities that require 24 hour care, who spend their lives watching every dollar and interviewing every home care worker; and,
  • They are marketplace customers who have coverage for the first time and are finally able to address symptoms they have long ignored.

These customers are our weathervane for costs as they feel – in the monthly premiums they pay each month – everything in the system that unnecessarily increases the cost to care.

There are, of course, millions of us in a wide diversity of health circumstances, but each of us are actually looking for a common set of things from the health care system: to intersect with a care system that understands us and provides reliable, quality care; to understand what comes next in the care process so we can get home and have as productive and as healthy life as possible; and increasingly, we worry about having have access to care we can afford.

So what becomes clear from understanding consumers better is that for the millions of us who work in health care, affordable care is now part of everyone’s job. While this question of affordability isn’t new, we are seeing it in a new way – through the eyes of the consumer.

We’ve talked for years about what health care would be like if consumers had a real voice in the health care system – if health care were retail like other industries. The health insurance exchanges have offered us the best insight into how consumer needs are reshaping health care. We’ve learned three things:

First, consumers are very active shoppers when they make their own decisions and unaffordable care is a deal breaker. Seventy percent of consumers changed plans during open enrollment and, those who switched, saved more than $500 a year. Where are they going? The winners are hospitals and plans that have partnered at lower overall costs.

Second, consumers prefer to shop for their health care, not their health coverage. Millions of times over, consumers on the exchange no longer shop by looking for a health plan; instead they select a hospital or physician or prescription they want, and then they see which health plan offers them.

And third, exchange customers are valuable relationships for care providers – most are previously uninsured patients who now have full benefits with no lifetime limits and often higher needs for care that span the spectrum of health care services. And many are looking to build new, solid health care relationships for their families.

With exchanges, we are moving to a world driven by highly engaged, relationship-oriented and valuable retail consumers. This means we all need to be a part of delivering access to care and reducing costs and premiums– governments with subsidies, health plans with MLR limits, and hospitals by reducing costs and passing it on to consumers. Ultimately, consumers will reward those who want their business and have an affordable strategy to get it.

Supporting Value

Access to care is one thing, but of course we want access to a system that delivers and re-enforces quality care. Our new alternative payment models are intended to recognize this and pay more for high quality care, smarter spending and care that results in healthier people.

We announced earlier this year that more than 30% of Medicare FFS payments are now linked to quality and cost outcomes. This means that more than 10 million Medicare patients are getting improved quality of care by having more time with their doctors and better coordinated care. And we are on track for alternative payment models to become the predominant payment system by 2018.

Patrick Conway will be here this afternoon to review the incredible progress over the last few years in the adoption of bundled payments, ACOs, and Medical Home models. He will also talk about the details of our newly released regulations coming out of the bi-partisan MACRA legislation. I will just touch at a high level on how we approached this critical implementation and what we hope to accomplish.


The implementation of MACRA allows us to take the next transformative step in the Medicare program, by introducing the Quality Payment Program to pay physicians and other clinicians for quality, with a more flexible approach, common-sense approach. Over the last several months, we have made an unprecedented commitment to listening to and learning from physicians and patients. We have spoken with more than 6,000 stakeholders across the country, physicians, patients, and other clinicians in a variety of local communities in order to design a proposal that is targeted to meet the needs of care delivery on the front lines.

First, the program is designed to be patient-centric by focusing on quality of care, the total care experience, and care coordination. We have reduced the number of measurements and built a lot of flexibility into the program so that the care measures selected can match the patient need as much as possible.

Next, we structured the program to be practice-driven by allowing physicians to choose their own metrics and the programs – whether the MIPS program introduced by Congress or the Advanced Alternative Payment Models that many clinicians are beginning to have experience with. MIPS is designed to be an attractive option while physicians consider ramping up over time into a variety of more advanced Alternative Payment Models. We also allow physicians who have experience with any ACOs to benefit from their experience.

Third, we have focused on simplicity wherever possible and taken what over time has become a patchwork of quality and other reporting programs and streamlined them into a single framework to reduce the burden on physician offices. Our proposal to replace Meaningful Use in the physician’s office with a new program Advancing Care Information, is an example of where we have responded to considerable feedback to move the focus from “clicking” to care provision and collaboration.

Over the next 60 days, the proposal will be available for public comment. We need meaningful engagement on this proposal and the team and I will be conducting dozens of listening sessions and educational sessions to collect feedback.

I offer one editorial comment on new payment models. We should all take a step back and recognize that all of them are at early stages. I compare them to the first and second generation iPhones, still getting their first use and allowing us to see what works and what doesn’t. We should – however – expect these models to get better and better with every release.

Our new Next Generation ACO model is a good example. It contains the features you have told us would best enable you to coordinate care, including innovative options like telemedicine, home visits, and direct patient incentive and engagement options.

We also clearly heard that hospitals want us to fundamentally re-think the benchmarking and rebasing methodologies in our Shared Savings ACO models and we published a proposed rule that reflected a lot of the input we received.  As they develop, it would be a mistake to view these models as fully calibrated incentives; rather they offer change management opportunities for the changes we all see ahead. Culture and leadership will always drive quality care; our job is to recognize it and reward it and enable investment in it.

Unfinished Business

For CMS to be successful, we must be committed to improving the lines of communication that allow us to close the gap between policy making and the realities of frontline care delivery.

CMS has significant responsibility for implementing new laws that must intersect with an already complex system with many demands. Good policy must be ultimately informed by the impact it has at the kitchen table of the American family and in the clinic or office where people seek care.

This translates into an aggressive agenda for CMS along several fronts which I want to be sure you’re aware of– simplification, rural health and interoperability.

Simplification. We must lead a simplification kick to reduce burden and give physicians back more time to spend with patients. Several years ago, we launched an initiative that is reducing regulatory burden and saving hospitals $3.2 billion over five years on burden and regulatory reduction. But we are barely scratching the surface. The work we’ve done recently over the two-midnight policy and the RAC program reflects the result of paying attention to significant feedback and is intended to create more discretion for care providers and move the RAC program from a “gotcha” feeling to a more educational and partner-oriented approach using QIOs. And we are in conversations now about finding opportunities to find ways to extend the simplifications of Advancing Care Information, the successor to Meaningful Use, into the hospital setting.

Rural health is another priority area for us. I recently announced a Rural Health Task Force to focus on short- and long-term steps to address the economics of health care in rural America, to look at access to care issues, and to make sure innovation gets driven evenly into rural America. That task force has hit the ground running and we have dedicated payment models, technical assistance funds, and provisions set up to specifically assist rural hospitals and other care providers.

We have worked with many of you and the vendors in the area of interoperability. Business models and practices that limit the flow of data and that don’t put the patient at the center must become a thing of the past. I encourage all of you to become part of our effort by using established standards and adopting contracts with vendors which doesn’t permit charges and other pernicious practices that prevent data from safely moving to where the care of the patient warrants. Together, we have made significant investments in new technology, but they will only be fully realized if Health IT becomes a connected platform for collaboration and innovation. Interoperability is a priority at the very highest levels of government.


I want to thank all of you for the work you do with Medicare and Medicaid beneficiaries every day.

I want to close by repeating the theme I hope you’ve heard from me as I laid out a very candid look at our agenda and the challenges we must all address. Success for us is helping build a better health care system for all Americans, with smarter spending, and that results in healthier people. As we move forward, we need to listen and stay close to the realities on the ground and work together with you to create new generations of solutions that work better and are simpler and reduce the distractions from patient care.

As leaders we have the opportunity to build on the record progress of the last several years and seize the mantle of delivering affordable care in this country. We look forward to doing everything we can as we work alongside in this in the months and years ahead.

CMS Finalizes its Quality Measure Development Plan

By: Kate Goodrich, M.D., M.H.S., Director, Center for Clinical Standards & Quality, CMS

On December 18, 2015, we posted our draft Quality Measure Development Plan, a strategic framework for clinician quality measurement development to support the new Merit-based Incentive Payment System (MIPS) and advanced alternative payment models (APMs). Through March 1, 2016, we asked for stakeholder feedback and received responses from 60 individuals and 150 organizations.

Thank you for your comments, which we carefully reviewed and considered as we revised and finalized the plan. I am happy to announce that we posted the final Quality Measure Development Plan on the CMS website today (

CMS aims to drive improvement in our national health care system through the use of quality measures and periodic assessment of the impact of such measurement. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) established payment incentives for physicians and other clinicians based on quality, rather than quantity, of care. We recently released the proposed regulation to implement these payment incentives, and more information is available here: The Quality Measure Development Plan is an essential aspect of this transition, which will provide the foundation for building and implementing a measure portfolio to support the quality payment programs under MACRA.

Highlights from the comments we received on the draft plan include:

  • Many commenters expressed support for the strategic approach of the Quality Measure Development Plan.
  • Responses favored CMS’ intent to engage clinicians, medical societies, and other stakeholders more broadly in measure identification, selection, and development processes for MIPS and APMs.
  • Professional associations representing diverse clinical practice areas identified current measurement gaps and proposed priorities for measure development that are directly applicable to their specialties.
  • Consumer advocates urged CMS to partner with patients, families, and caregivers and recommended a model for engaging them in measure development.
  • Many commenters approved of the approach envisioned by the National Testing Collaborative and the National Quality Forum (NQF) Incubator to promote early engagement of stakeholders in measure development and testing.
  • Both organizations and individuals contributed insights into the integral roles of their clinical professions or practices in the U.S. health care delivery system.

Taking these comments and suggestions into consideration, CMS finalized the Quality Measure Development Plan to include:

  • Identification of known measurement and performance gaps and prioritization of approaches to close those gaps by developing, adopting, and refining quality measures, including measures in each of the six quality domains:
    • Clinical care
    • Safety
    • Care coordination
    • Patient and caregiver experience
    • Population health and prevention
    • Affordable care
  • CMS actions to promote and improve alignment of measures, including the Core Quality Measures Collaborative, a work group convened by America’s Health Insurance Plans (AHIP). On February 16, 2016, CMS and the Collaborative announced the selection of seven core measure sets that will support multi-payer and cross-setting quality improvement and reporting across our nation’s health care systems.
  • Partnering with frontline clinicians and professional societies as a key consideration to reduce the administrative burden of quality measurement and ensure its relevance to clinical practices.
  • Partnering with patients and caregivers as a key consideration for having the voice of the patient, family, and/or caregiver incorporated throughout measure development.
  • Increased focus and coordination with federal agencies and other stakeholders to lessen duplication of effort and promote person-centered health care.

The MACRA law provides the opportunity to further progress the Medicare program and our national health care system toward paying for value rather than volume.  However, the successful implementation of the Quality Payment Program established by MACRA requires a partnership with patients, their families, frontline clinicians, and professional organizations to develop measures that are meaningful, applicable, and useful across payers and health care settings. We thank all who contributed comments and dialogue to the draft CMS Quality Measure Development Plan, and we look forward to partnering with you on these exciting efforts related to our quality payment programs.



Get every new post delivered to your Inbox.

Join 1,088 other followers

%d bloggers like this: