Acting Administrator Slavitt Speech before the National Rural Health Association

Below are the prepared remarks of CMS Acting Administrator Andy Slavitt for the 27th Annual Policy Institute of the National Rural Health Association in Washington, D.C. on February 2, 2016.

Thanks for the introduction and the opportunity to discuss our agenda for 2016 and talk about our strategic priorities for rural health care.

Some of you may know I came to Washington last year after 20 years in the private sector after being part of an extraordinary effort leading the turnaround of Healthcare.gov.  Like many of you I had been focusing on the same health care problems—access, quality, and cost—in some form or other for my entire career.

What drew me to stay in Washington was the idea that the health care agenda—finally changing how we pay for care so we can reward for quality and value and expanding access to coverage through Marketplaces and Medicaid is now focused on getting things done.

Before I jump a bit more into the weeds, let me say that over one year in I can report how glad I am I took this on.  I have certainly never faced a larger and more interesting agenda and I think we can make the kind of national difference not seen since the launch of Medicare and Medicaid 50 years ago, back when tens of millions of Americans gained health coverage and millions were lifted out of poverty.

Our charge at CMS is simple– meeting the evolving needs of 140 million Americans, most on low- or fixed-incomes– whether they are living with a disability, trying to afford a prescription, or hoping to keep coverage as they look for a better job. These are the people we serve every day and these are the people I wake up every day thinking about. Since my email address is available to the public, I now know many of them wake up every day thinking about me too.

As I listen to people and read their emails, I quickly realize that even in a wide diversity of circumstances, how many people are just hoping for the same basic things from the health care system– to get care when they need it and be able to afford it, to have their family well taken care of, and when they’re sick, to get them home and to lead as productive and healthy life as possible.

Many others who don’t access Medicare, Medicaid and the Marketplaces today have been paying in their entire adult lives. They expect us to get value for what we spend by efficiently and effectively taking care of people and focusing on making sure these programs thrive not only today but are there when they need the programs in the future.

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In that interest, our priority today is to drive towards a health care system that provides better care, smarter spending, and that keeps people healthier.

And 2015 was an important year on a number of fronts.

  • We committed publicly to change how we pay for care so that by 2018 over 50% of Medicare FFS payments will be linked to improved quality and smarter spending. To support this we’ve released new models, more real time data and hundreds of millions of dollars in technical assistance.
  • We’ve led the largest data transparency initiative in health care, releasing tens of millions of lines of data to support physicians and for new consumer websites.
  • In partnership with you, we implemented the ICD-10 changeover, the Y2K that never happened.
  • We brought payment models that reward quality and consumer transparency to hospice, Medicaid, home health, and post-acute care to make sure everywhere a consumers go, we are sending the signal that quality matters.
  • We moved the needle on end of life care and enforced the notion that doctors jobs are to talk to people not just cut them or write them a prescription.

And we’ve been making gains since we’ve move from the original policy debates over the ACA to this implementation stage. We’ve now crossed 17 million and counting newly insured since the start of the ACA and just completed a successful open enrollment where millions more got coverage. We’re not just making gains in access, but we are making health care safer and higher quality, with improvements in 95% of quality measures across the country. And we continued to do this at still historically low medical trends.

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Personally, my best moments haven’t been spent behind my desk making policy in D.C., but in communities across the country, meeting with hospitals and physician practices, sitting in call centers and PACE centers, talking to innovators, and many care providers who are on the front line of keeping up with record changes. And I’ve learned that people are more than willing to share the areas they believe we need to focus on. Let me play back some of the feedback as it has helped to shape our 2016 agenda:

First, while there is growing recognition today that the country is changing how care is paid for to account for cost and quality, the transition is difficult and many care providers need help along that path. Clear, consistent policies from us are one important step. I have the not so distant memory of trying to understand CMS’s goals by wading through regulations so my commitment to you is to be clear in what we say and make sure our actions support it. Whether in ACOs, bundled payments, primary care, oncology or soon to be specialty models we support as we implement MACRA, we will reward for better care, higher quality care, more coordinated and patient centered care– not simply more care. And our goal isn’t simply to launch new models, but to support better outcomes and a simpler delivery system.

The second thing I hear is that there are many new things coming out of Washington– and those things don’t always arrive in a form that reflects the immediate realities and capabilities of care delivery. It’s important to step back and understand that new payment models, like the new Marketplaces, are just finishing their first generation. Our critical job at this stage is to listen, learn and adapt so the second and third generations work better on the front line. Our newly launched Next Generation ACO model contains the features provider groups around the country have told us would best enable them to coordinate care including innovative options like telemedicine, home visits, and direct consumer incentive and engagement options. And last week we proposed new rules that will significantly improve how benchmarking is done for the Medicare Shared Savings models to more accurately reflect regional variations. There will now be over 475 total ACOs in 49 states with 30,000 physicians and covering nearly 9 million beneficiaries. As providers have gained comfort, we now have not only more ACOs, but better ACO, with 1.6 million in better, more advanced models. Even still, think of this much like the second generation iPhone and we need your participation and your input to continue to improve the models.

Third, I hear frustration at the level of administrative burden in health care. The one thing I remember well from my past life is how sometimes a good policy idea in Washington, by the time it hits the ground in the real world becomes a compliance program or worse, takes time away from patients and gives very little back. We must reduce burden further.

Several years ago, we launched an initiative that is saving hospitals a documented hundreds of millions of dollars annually on burden and regulatory reduction. But we are barely scratching the surface. This year we will launch initiatives for Medicare and private health plans to align on how we measure and how we provide data with the goal of putting the provider and patient back in the middle. We have reformed policies like the 2 midnight rule in order to focus on education and quality improvement and not what felt like punitive second guessing. And we have listened to physicians around the country who have told us that the Meaningful Use program often takes time away from patients due to data entry and reporting burden that doesn’t always improve care. In this space, we have to get the hearts and minds of physicians back. I think we’ve lost them.

I want to focus on technology for a moment because it obviously holds great promise as it does in other parts of our lives– to connect us to one another, to improve our productivity, and to create a platform for a next generation of innovations that we can’t imagine today. Now that we effectively have technology in virtually every place care is provided, it’s time for us to step back from where we’ve been and make sure that our EHR incentive program allows technology to do what it’s intended to. This year, starting in the physician’s office, the bipartisan MACRA legislation offers us the opportunity to step back from Meaningful Use and to move towards a better system. We will be putting out details over the next several months, but there are several themes which inform our approach specific to technology.

  • First, the focus will move away from rewarding providers simply for the use of technology and towards the outcome they achieve with their patients.
  • Second, providers should be able to customize their own goals so tech companies can build around the individual practice needs, not the needs of the government. Technology must be user-centered and support physicians, not distract them.
  • Third, we need to aid this is by leveling the technology playing field for start-ups and new entrants. We are requiring open APIs so the physician desktop can be opened up, moving away from the lock that early EHR decisions placed on physician organizations to allow apps, analytic tools, and connected technologies to get data in and out of an EHR securely and adapt to the way physician’s want to work, not dictate it.

And finally, we are deadly serious about interoperability. We will begin initiatives in collaboration with physicians and consumers toward pointing technology to fill critical use cases like closing referral loops and engaging a patient in their care. And technology companies that look for ways to practice “data blocking” in opposition to new regulations will find that it won’t be tolerated.

As you know, the MACRA legislation applies to physician office care, not hospital incentives, but we will also be exploring vehicles to align hospital measurements with these principals as well. As we move forward, there will be critical opportunities to engage on the details and invite public comment. Our goal in communicating our principles now is to give everyone time to plan for what’s next and to continue to give us input, not take their foot of the gas on current initiatives.

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Let me turn to our critical agenda in rural America. First I want to articulate to you that we think it will take a concerted and proactive effort on our part– like everyone’s– to help make the kind of progress in rural health care that we think is so vital.

In order to make sure we invest strategically, we are establishing a CMS Rural Health Council to work across the entire agency to oversee our work in three strategic priority areas– first, improving access to care to all Americans in rural settings; second, supporting the unique economics of providing health care in rural America; and third making sure the health care innovation agenda appropriately fits rural health care markets.

Let me spend a second on each of them and discuss how we hope to continue to improve our engagement with all of you.

Individuals in rural America are older, with lower incomes, and are more likely to be without access to insurance. Right now, over 60 percent of the uninsured live in rural areas in states with a coverage gap. Nearly 3/4 of exchange consumers in rural areas had an income less than 250% of the federal poverty level.

We have made continued efforts, with the help of many of you, to reach, educate and sign people up for coverage. As of a week ago, close to 2 million people in rural areas across the country have signed up for coverage on an Exchange and if states expand Medicaid, that means millions more. After the last few years, we now know that Medicaid expansion makes people healthier, improves the state economy, reduces hospital bad debt by at least double digits and helps millions of Americans live a life without the constant fear of a child getting injured at recess or ignore an unexplained lump in their breast or deal with alcoholism or depression. But we also know that Medicaid solutions must come from the states and must uniquely reflect local dynamics.

And just as we have in places like Indiana, Alaska, Montana and Pennsylvania, we are open to listening and supporting state initiatives to expand care to those who need it. States that find their path to expansion will find that everyone benefits—their residents, their providers, the state budget and the state economy. So for states who are interested, I have one message: call, email or text. We are ready to talk!

Tied to our focus on access, the second leg of our rural strategy is making the economics of health care sustainable in rural America. We have invested in areas such as ESRD to acknowledge the difference in providing care in rural settings; we allow for rural health clinics to bill uniquely for chronic care management and we have taken care to exclude hospitals and physician practices from bundles and other payment structures where lower patient volumes and lack of contracting partners could inappropriately penalize them. All the while we have worked to find and reduce burdensome regulations specific to small critical access hospitals and rural health clinics– for example, by eliminating the requirement that a physician be held to a prescriptive schedule for being onsite. We know there are more areas that would help you. And both the Administration and the Congressional leaders you are visiting need to be part of that solution.

But, our goal isn’t and can’t be to exclude rural physicians and hospitals from the models we believe will advance health care. We simply want to make sure they fit with the realities of the local markets where you operate. This is why, a few weeks ago, we announced additional funding for an expansion of the National Rural ACO Consortium. This funding will fuel the continued growth and expansion of 23 Rural ACOs across the country who are serving half a million Medicare beneficiaries.

This is why innovation is the third essential leg of our strategy. We need to promote and adapt new models and allow for different technologies and approaches to make a real difference for patients. Our team has been hard at work to customize models for rural markets.

  • Through Medicaid State Innovation Model grants, which provide technical support for smaller rural hospitals, and to pursue new flexibilities in care delivery such as the creative use of Community Health Workers and EMTs to expand access points.
  • We are deploying creative approaches to allowing rural communities to aggregate a sufficient lives so they can benefit from the major opportunities that exist in population health. In Maryland, 10 rural hospitals were successful early adopters of what we called a “total patient revenue system,” which provided hospitals with a guaranteed revenue stream to care for a geographically defined population. Now we are exploring building off of this model in other rural regions of the country who are interested in having Medicare participate in multi-payer global budgets.
  • The Frontier Community Health Integration Project which is coming this summer aims to develop and test new models in geographically isolated areas through telemedicine, adding swing beds and other approaches to integrated health care.
  • Our ACO investment model, which prepays shared savings for hospitals who don’t have the wherewithal to invest in ACO infrastructure, now serves 350,000 rural beneficiaries through 1,100 rural providers, making over $72 million in upfront and ongoing payments to rural ACOs.
  • And we are capitalizing on every opportunity we can in both Medicare and Medicaid to incorporate telemedicine where appropriate. Today, in fact, CMS is publishing a final rule on Medicaid home health requirements which for the first time allows for a face-to-face encounter to occur using telehealth.

The bottom line as I hope you are seeing, is we are investing and must continue to invest in rural America because we believe those investments can pay off for our beneficiaries and are necessary to sustain an equitable system. And we need to do our jobs best by understanding the realities in the front line and maintaining high standards for progress anywhere one of our beneficiaries is served.

The Rural Health Council will help promote a strategic focus on access, economics, and innovation issues across rural America. They will help us review each of our regulations for impact on the fundamentals of rural health care markets. The council will also make long-term recommendations to make sure the voice of our regional offices can be heard on important areas of policy for CMS. As you know, CMS hosts a Rural Health Open Door forum call every six weeks to update you on new CMS policy and initiatives, and at one of our upcoming sessions, the Council will seek input into our very important 2016 agenda. I’m excited by what we’ve begun and I’m even more excited that this gives us a base to formalize a strategic approach to rural America across CMS.

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I want to close by repeating the theme I hope you’ve heard from me today. Success for us is helping build a better health care system for Americans, with smarter spending, and resulting in healthier people across all settings. We are at early stages. And we need to work for it by staying close to the realities on the ground and adapt and create new generations of solutions; we need to simplify things more aggressively; and we must commit to a clear, urgent agenda on behalf of the American public. This is what the implementation stage of health care needs to deliver. We look forward to working with you in the coming months and years.

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