CMS announces extension of 2016 reporting deadline and intends to modify 2017 requirements for reporting eCQM data under the Inpatient Quality Reporting and EHR Incentive Programs for Hospitals

By Kate Goodrich, MD
Director, CMS Center for Clinical Standards and Quality & CMS Chief Medical Officer

Today, I am pleased to announce that the Centers for Medicare & Medicaid Services (CMS) is notifying eligible hospitals and critical access hospitals participating in the Hospital Inpatient Quality Reporting (IQR) and/or the Medicare Electronic Health Record (EHR) Incentive Programs of a deadline extension.  The extension is for the submission of electronic Clinical Quality Measure (eCQM) data for the 2016 reporting period, pertaining to the fiscal year (FY) 2018 payment determination.  The deadline has been changed from Tuesday, February 28, 2017, to Monday, March 13, 2017, at 11:59 p.m. PT.  This extension is being granted to provide hospitals additional time to submit eCQM data.

CMS also intends to initiate the rulemaking process regarding modifications to the eCQM requirements established in the FY 2017 Inpatient Prospective Payment System (IPPS) final rule in response to concerns raised by stakeholders.  In order to help reduce reporting burdens while supporting the long term goals of these programs, we intend to include proposals regarding the 2017 eCQM reporting requirements for the Hospital IQR and EHR Incentive Programs for eligible hospitals and critical access hospitals in the FY 2018 IPPS proposed rule that we anticipate to be published in the late spring of 2017.

Specifically, in the FY 2018 IPPS proposed rule, CMS plans to address stakeholder concerns regarding challenges associated with hospitals transitioning to new EHR systems or products, upgrading to EHR technology certified to the 2015 Edition, modifying workflows, and addressing data element mapping, as well as the time allotted for hospitals to incorporate updates to eCQM specifications in 2017.  CMS is also considering to propose in future rulemaking to modify the number of eCQMs required to be reported for 2017 as well as to shorten the eCQM reporting period.

We believe that these efforts reflect the commitment of CMS to create a health information technology infrastructure that elevates patient-centered care, improves health outcomes, and supports the healthcare providers who care for patients.  We continuously strive to work in partnership with hospitals and the provider community to improve quality of care and health outcomes of patients, reduce cost, and increase access to care.

For more information about eCQM reporting for the Hospital IQR and EHR Incentive Programs, please visit the and the websites.

Building The Value-Based Health Care System Of The Future Depends On Meeting Clinicians’ Data Needs

Dr. Vindell Washington, National Coordinator for Health Information Technology (ONC) and Andy Slavitt, Acting Administrator, Centers for Medicare & Medicaid Services (CMS)

Data is the lifeblood of the value-based payment environment. Every time a doctor takes care of a patient, we have an opportunity to use information in ways that help patients get better care. The goal is to use the information from each patient encounter to make the next encounter better – across the entire healthcare system. But it is easier said than done. As we prepare to transition from this administration, we’d like to take stock of what our nation has accomplished and to lay out a potential roadmap for the next administration.

Making data easy to use begins by putting it into secure, private, digital form. During the past seven years, we’ve made remarkable progress towards this goal: in 2015, over 77 percent of office-based physicians reported using a certified electronic health record (EHR) to inform clinical care, while the percentage of office-based physicians with any EHR has doubled since 2008. As we hoped, digital tools have helped us reduce medical errors by, for example, e-prescribing and having fewer follow up items fall between the cracks. But we still have a lot of work to do.

While the tools are improving, some clinicians remain frustrated by the limited usability of their technology and data, from their inability to easily enter and access key information when and where they need it at the point of care to challenges in accessing timely feedback on the quality of care in their practice. We need 21st century information technology, enabling ready and secure data access, to support a modern, value-based healthcare system.

New Tools

One obstacle is the efforts of some vendors to put up barriers to sharing data. Fortunately, the bipartisan 21st Century Cures Act, which was enacted in December 2016, takes a significant step toward overcoming that obstacle. The Act advances interoperability through several provisions including the prohibition of information blocking and authorization of penalties of up to $1 million per violation. The law also gives ONC new authority to address usability and interoperability through additional conditions of certification for health information technology (health IT) developers related to: access, use, and exchange of electronic information; usability, security, and business practices; real-world testing; and publishing application programming interfaces (APIs).

We have also launched new tools to address these challenges under the recently established Quality Payment Program (QPP). This program created by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) uses a number of tools to reward Medicare clinicians for quality of care over quantity of services provided. These tools include a web application and public API designed to help clinicians, registries, and others in the CMS vendor community more easily share and receive feedback about performance. By consolidating previous programs such as the Physician Quality Reporting System (PQRS) and the EHR Incentive Programs (Meaningful Use); creating more ways for clinicians to participate; significantly reducing requirements by reducing the  number of measures; and providing additional flexibility in selecting meaningful measures, QPP also reduces administrative burden.

Yet the Department of Health and Human Services (HHS) recognizes that clinicians work with many payers, not just Medicare alone; in fact, the average physician practice now contracts with 12 different insurers. And that can lead to an additional set of challenges: access to data across disparate payers and settings is variable; the lack of comparability from multiple sources makes it hard to obtain actionable insights to inform care; and clinicians face increased administrative complexity if they participate in alternative payment model programs tied to different payers, each with unique requirements around quality measures, formats, and submission methods.

A Vision For The Future

We must overcome these challenges to enable clinicians to continuously improve quality and to ensure the nation gets more value from each healthcare dollar. That’s why HHS envisions a future where clinicians in a multi-payer environment obtain actionable, reliable, and comprehensive feedback data regardless of who pays for their patients’ care. HHS also envisions streamlined quality reporting, where clinicians collect data as part of the normal course and share it at the push of a button with any authorized party. Finally, HHS will continue to work towards minimizing the financial and administrative burden of collecting and reporting information on clinicians and practices, especially small practices and those in rural and underserved areas.

The federal government should only play a modest role in the ecosystem necessary to support patients and physicians. We believe that ecosystem requires the following six elements to ensure a data-rich, patient-centered, and value-based health care system:

  1. Seamless interaction between point of care solutions and other entities, including through the use of standard APIs. Health IT developers can play a key role in this vision by making it easier for clinicians to share data between their EHRs and other applications or services, such as registries, empowering clinicians to assemble the right tools and services for their practice.
  2. Growth of third-party entities that can meet provider data access and reporting needs. Clinicians will benefit from a robust marketplace of trusted entities that can perform core functions like facilitating quality reporting to all payers, combining data from disparate sources of care in a medical neighborhood and presenting it in a usable way, and helping clinicians to understand data on their patients—at a reasonable cost. For instance, vendor partners working with select regions participating in the Comprehensive Primary Care initiative have made important progress in recent years by providing aggregate feedback reports including data from both Medicare and commercial payers.
  3. Use of low-cost shared services necessary for aggregating and linking data. Value-based payment relies on a variety of core services, such as accurate information on the identity of patients and providers to carry out key tasks like attributing patients to providers. Stakeholders could realize significant efficiencies by coming together around shared governance and financing for such services. Many of the participants in the Center for Medicare and Medicaid Innovation (CMMI) State Innovations Model have taken just such an approach.
  4. Greater data transparency and data consolidation. Efforts like state All Payer Claims Databases and Medicare Qualified Entities that bring together data from multiple payers in one place can provide stakeholders with a single place to go for data, while reducing the burden on the payers who want to make their data available.
  5. Standardization of key patient data needed for quality measurement. ONC and CMS can assist in fostering ongoing standardization of data for measures as well as development of related tools, such as libraries of data elements that allow new electronic measures to be easily captured, calculated and reported for use by clinicians and consumers.
  6. Alignment around how quality is measured and reported across payers. By coming together around common quality measures and reporting mechanisms payers can ensure clinicians have access to more useful, aggregated performance feedback, while increasing the comparability and auditability of measurement results. Efforts such as the Health Care Payment Learning and Action Network, and the Core Quality Measurement Collaborative (which identified 7 core sets of quality measures that CMS and commercial payers have committed to using) have begun to make such alignment possible.

HHS has heard a great deal about the challenges clinicians are facing as they look towards value-based care. As HHS leaders continue this crucial dialogue, we look forward to hearing from you about what’s working today and what’s not, as well as your ideas about what the Federal Government and the private sector can do to make progress in this area.

It’s been a great honor working with the health care community and serving the American public. Working together across the health care landscape, the nation can move towards a truly 21st century data infrastructure that frees clinicians to confidently transition to value-based payment and realize better care, smarter spending, and healthier people.

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CMS partners with commercial and state insurers to support primary care practices and reduce clinician burden

By    Dr. Patrick Conway, Acting Principal Deputy Administrator and Deputy Administrator          for Innovation & Quality and
Pauline Lapin, MHS, Director, Seamless Care Models Group, Center for Medicare &                  Medicaid Innovation

Over the past few years, the Centers for Medicare & Medicaid Services (CMS) has committed to supporting clinicians by providing them with actionable data. This is part of the Administration-wide initiative to unlock government data to promote innovation and best practices. Today, we are highlighting one way we have reached this goal and sharing how we plan to use the lessons we’ve learned in future efforts.

With the growing use of health information technology to support care delivery, using data to guide patient care has become increasingly important and common. Not surprisingly, data transparency has become a focus of primary care clinicians. In the past, practices were often left wondering what happened to patients outside of the four walls of their primary care offices. Even when practices do have access to data, clinicians often spend time sifting through multiple reports from different insurers, each with its own set of measures, and format, and much of the data is only applicable to a portion of the clinicians’ patients. Aggregated data allows clinicians to get an overall snapshot of their patient population to identify care gaps and target areas for population health improvement. It also reduces burden and saves staff time, which helps primary care clinicians focus on what they were trained to do: deliver high-quality patient care.

In the Comprehensive Primary Care initiative (CPC), a model from the CMS Innovation Center that ran from 2012 to 2016 and aimed to strengthen primary care, CMS convened payers in seven regions to test whether delivering comprehensive primary care at each CPC practice site — supported by multi-payer payment reform, the continuous use of data to guide improvement, and meaningful use of health information technology — could achieve better care, smarter spending, and healthier people. In three of these regions – Colorado, the greater Tulsa region of Oklahoma, and the Cincinnati-Dayton region of Ohio and Kentucky – CMS and payers collaborated to produce reports that combined privacy-protected patient-level health data from multiple payers into a single report given to participating primary care practices. Payers worked closely with participating CPC practices and CMS to define priorities, governance structures, and refine the format and content of the reports. In turn, data aggregation specialists collaborated with the payers in each region to combine and streamline delivery of that data, ensuring the highest level of security of the health information.

“This was a much anticipated solution to the complexities posed by not having access to consistent claims data, and a continuous desire to improve our approach to meeting CPC Milestones [program requirements],” said Dr. Austin Bailey, Medical Director of University of Colorado Health (UCHealth), which participated in CPC. By having all data in one place, UCHealth practices were able to quickly and easily identify gaps in patient care and see exactly what services their patients were receiving outside of their practices.

“Our practices will continue to leverage the use of aggregated claims data using Stratus [the tool for practices in Colorado] to identify the cost patterns of high risk patients — for example, among our patients with diabetes, is the greatest cost associated with specialists, emergency department utilization, or medications?  Having this information across multiple payers makes it more relevant and helps to build our confidence in selecting the appropriate interventions, identifying trends, and effectively assigning care management resources,” said Dr. Bailey.

Many CPC practices are taking the important skills and lessons they’ve learned into the newest CMS Innovation Center primary care model, Comprehensive Primary Care Plus (CPC+). Built on the foundation of CPC, CPC+ began this month on January 1, 2017, supporting primary care practices located in 14 regions across the country, with over 50 commercial payers and state Medicaid agencies partnering with CMS.

We expect that aggregated data reports will be a top priority for CPC+ practices and partner payers and we look forward to the opportunity to build on the tremendous success we’ve had with data aggregation in CPC. Public and private payers working in partnership with primary care clinicians, engaging patients, and delivering the right data and information is essential to improving our health system and the care delivered to patients.

Vendors and partner payers that participated in CPC data aggregation with CMS, by region:

Vendor: Best Doctors, Inc.
Participating payers: Aetna, Anthem Blue Cross Blue Shield, Cigna, Colorado Choice Health Plans, Colorado Department of Health Care Policy and Financing (Medicaid), Medicare fee-for-service, Rocky Mountain Health Plans, UnitedHealthcare

Greater Tulsa region
Vendor: My Health Access Network, Inc.
Participating payers: Blue Cross Blue Shield of Oklahoma, CommunityCare, Medicare fee-for-service, Oklahoma Health Care Authority (Medicaid)

Cincinnati-Dayton region
Vendor: The Health Collaborative
Participating payers: Aetna, CareSource, Buckeye Health Plan, Anthem Blue Cross Blue Shield, Humana, Medical Mutual of Ohio, Medicare fee-for-service, Ohio Medicaid, UnitedHealthcare

Slavitt Farewell: Meeting the Moral Test of Government by Building on Progress Made

Below are the remarks of Acting CMS Administrator Andy Slavitt at the 35th annual JP Morgan Healthcare Conference in San Francisco, Calif. on January 9, 2017.


It’s great to be with you here this afternoon for what will be my last public speech in my current role. Although I will tell you in a minute about an excellent panel at 6 o’clock that I’m really excited for.  Whatever finale speech I had planned in my head in early November will have to wait for another day. I started a new one late in the evening on November 8th.

It’s been an honor to be a small part of making record progress in the last eight years—progress long overdue for so many. Let’s remember what things were like just a short time ago before the ACA: we had record levels of people without insurance, unsustainable medical cost growth and poor quality health.

Thanks to the hard work of many, over the last eight years, things have finally begun to change. In fact, there hasn’t been a greater stretch of progress in our nation’s health care system as we’ve seen in the last eight years:

  • We are covering more Americans: More than 20 million Americans have been newly covered and the uninsured rate is under 9 percent, the lowest it’s ever been.
  • We are making advances in quality: It is now safer to use the health care system than it was eight years ago. Across the country, people are getting higher quality care with 95 percent of national quality metrics improved over the last eight years. Thanks to this focus on quality, 125,000 lives have been saved.
  • We are bending the cost curve: Our national economy is now projected to spend $2.6 trillion less on health care over the next decade – even as 20 million more people have health coverage. Medicare cost trends have been reduced from 6% pre-Obama to under 2 percent.
  • Health care is more affordable for everyone: That’s true if you’re covered through Medicare, where you’re paying less for prescription drugs because the ACA closed the donut hole. It’s true if you get covered through the individual market, where, before the law, most plans didn’t cover maternity care, a third didn’t cover mental health, and almost 1 in 10 didn’t cover prescription drugs. Today, every Marketplace plan covers all of those services by law. And it’s true if you get covered in the employer market, where more than half of people used to have plans with lifetime limits – but now those limits on coverage aren’t allowed.
  • We have achieved strong fiscal discipline: During this period, we have reduced the Federal deficit by 2/3 and added a decade to the Medicare Trust Fund.
  • And, what it’s all about in the end: Making real gains in the lives of millions of Americans. The share of Americans who can’t afford needed care has fallen by more than a third. Record numbers of people report being able to see a regular physician and fill their prescriptions. As we hear about constantly, every year tens of thousands of lives are being saved.

And the private sector has flourished during the Obama years. Even as we have bent the cost curve and gotten more efficient. I did this analysis on November 8th. Health care companies outperformed the broader S&P 500 by 15 percent, which itself has more than doubled, since the ACA. And each sector—managed care, health IT, medical devices, hospitals, and pharma all well-outperformed the S&P. The Obama years have surely not been about a “Federal takeover” of our health care system.

The health insurance market is also more stable and growing. We are seeing record enrollment this Open Enrollment despite the obvious headwinds. And, according to S&P, the insurance exchanges are stabilizing after what they call a “one-time adjustment” to underpriced premiums. S&P’s outlook is for Exchanges to break even in 2017—and many are already. These results are from specific tough actions taken in the early stages of this market by companies and states and by our continued focus on improving the rules governing the risk pools.

I have a simple mental model of a before-and-after picture that I used during my years in the private sector that I would use when taking on anything new. Have we made things better for the American people? By so many measures, we have.

Of course, our “after” picture is the new Administration’s—and the new Congress’s— “before” picture. We pass the baton and the job ahead is to improve on the results of the Obama years, where we covered millions more Americans, reduced the deficit, bent the cost curve and, in the private sector, supported the creation of hundreds of billions of dollars in new market cap — and over 2 million new jobs in health care alone.

This is not to say that there aren’t opportunities for improvement. There are. The ACA was intended as the beginning of the journey, not the destination. But any changes need to build on what we’ve already accomplished and move us forward. The American people are going to judge any changes to the ACA based on common sense tests.

Does it provide coverage to at least as many people?

Does it maintain the quality of coverage or does it move us backwards with caps and loopholes?

Does it bend the health care cost curve in the right direction or does it cost American families more money?

And is it fiscally responsible?

If it fails on any of these tests, it is a step backwards.

But if any plan can improve the ACA, we should all embrace it. Let me be clear in saying this. There should be no pride of authorship. It doesn’t matter if a better plan comes from a Democrat or a Republican. We should all have a rooting interest in more progress.

This is what Americans are saying. Since the election, polls are showing that the majority of people, no matter who they voted for, want to build on what we have started, and not start over with a repeal. That should be a clear signal to the incoming Administration– the same one we had—to keep improving the before and after picture—and the lives of the Americans people.

And in overwhelming numbers, people insist on seeing the darn plan before anything happens.

A scheme that repeals the ACA with only the promise to produce a replacement plan later, as some are suggesting, is irresponsible. Millions of Americans and their families would be harmed by this scheme and indeed, many are sharing their fears on social media and calling our call centers, rightfully confused and panicked by this uncertainty.

Not putting a replacement plan forward would create needless chaos for hospitals and insurance companies. They need to begin making decisions on their 2018 participation just a few months from now. In board rooms across the country, there is one way to deal with uncertainty—and that’s by reducing investment and limiting exposure. With no clarity about the future of the individual mandate, premiums would very likely increase and many health plans would reduce their participation or drop out.

One reason people are expressing so much concern is because once a repeal vote happens, a replacement vote is far from guaranteed. In the parlance of Washington, the “pay fors” would disappear. Getting bipartisan support for the creation of a new plan and finding brand new money is infinitely harder than improving existing legislation.

Running CMS, one reason I proactively communicate so aggressively is that I remember what it was like in the real world. If you ask 20 percent of the economy to wait for a replacement and don’t think that will have an impact, you need to get out more.

I think this is why the real world is speaking up at a time when many would prefer to be quiet: the actuarial community, the physician community, cancer patients, hospitals, health plans, insurance commissioners, liberal and conservative policy experts a growing bi-partisan list of governors and Senators are warning us of the perils of quote “repeal now and hope to replace later.”

All of which means that if there is a repeal-only vote, the health care sector must plan as if the ACA will never be replaced. We are all trying to comprehend the impact of such an act. What experts are saying so far:

  • The obvious impact is on coverage. An estimated 30 million Americans will become uninsured.
  • The loss of pre-existing condition protections will immediately affect 127 million Americans. Not good for people or the emerging gig economy.
  • That would be especially challenging because we know this scenario would reduce employment. The hospital sector is already forecasting, and I quote, “massive job losses.” By one estimate, 2.6 million jobs, many of them in small communities around the country, would be lost.
  • Hospital bed debt would increase by an estimated $1.1 trillion over the next decade and hospital finances would suffer greatly, with losses estimated at over $165 billion by the middle of the next decade.
  • Don’t expect any savings from this. All of this would add $350 billion to the Federal budget deficit and wreak havoc on state budgets.

This is not the before-and-after picture Americans are looking for.

After the repeal conversations, the Medicaid program looms as the next part of the agenda, and therefore the before-and-after picture for the American public. Let’s start with a quick refresher of what the Medicaid program does.

  • It’s largely how we cover kids. Medicaid is the leading financier of maternity and prenatal care and about 1/3 of the country’s children (over 30 million) are covered by Medicaid and CHIP;
  • Medicaid is how we cover seniors. Half of the long-term care we provide in this country to our seniors is provided by Medicaid;
  • And it’s how we cover people with disabilities. More than 40 percent of Medicaid resources covers care for people living with disabilities, which but for a little bad luck would be anyone of us or anyone in our family.

Some in Congress are hoping to change Medicaid to a “block grant” or “per capita” program. This is sometimes described as an opportunity to give more flexibility or control for states to innovate. Don’t let the language deceive you. A block grant has nothing to do with innovation or state control or flexibility– those things are available to states today. Look at Indiana and their HSA-based expansion or Arkansas and their market-competition based expansion. Neither of those needed a block grant to innovate.

In reality, what a block grant does is place a cap on the money the federal government commits to states to run Medicaid. In other words, it takes control from states and gives it to the federal government.

We do have a live Medicaid block grant in Puerto Rico. The Commonwealth has had a block grant system for decades and at one point a few years ago, I think it felt like a windfall. What’s the picture in Puerto Rico right now? Puerto Rico has one-quarter the number of ICU beds per capita as the mainland, and no trauma burn units. American citizens wait to see the doctor, or they don’t go at all. Twice as many people have heart disease, and nearly twice as many report being in fair or poor health. And Puerto Rico’s block grant is hampering its ability to cope with its fiscal crisis and the Zika epidemic. I have never talked to a governor who envies Puerto Rico.

If you’re a governor, what happens when the usual but impossible-to-plan for happens– like the opioid epidemic or a promising new expensive cure for something like Hepatitis C. With no Federal financial support, they are on their own. Whose care gets cut? Kids? Seniors? People with disabilities?

So, if block grants don’t control the cost of care, what does? Medicaid managed care has made this decades-old idea of block grants obsolete. Three-quarters of Medicaid is already capitated or in similar arrangements. And Medicaid is our country’s most efficient health care program, far more so than Medicare Advantage and approximately 20 percent more efficient than commercial insurance on an apples-to-apples basis.

This is not ideological—it is a pragmatic, centrist concern over a before-and-after picture that would harm states and the American public. Congressional proposals for block grants would cut Federal support for Medicaid by 1/3 to ½ by the end of a decade. The Kaiser Family Foundation estimated that would result in 14 to 20 million Americans losing coverage—entirely on top of ACA coverage losses. And those cuts ripple across communities– from small rural hospitals and health centers to large health systems that are in urban areas.

The good news is we have don’t have to take a step backward. The American public expects us to take what is working and build on it. The immensely popular features of the ACA like free preventive care and ending the pre-existing condition limitations should be left alone and the focus should be on a limited number of improvements that spur competition and increase affordability.

Many of these can be implemented at the state level and enjoy bipartisan support. Alaska, with a Republican legislature and an independent governor, recently implemented a reinsurance pool that dramatically reduced rate increases. And states that have expanded Medicaid have a 7 percent lower premium in the Marketplace.

Let’s get back to what we should be focused on as a nation. We have begun a journey over the last seven years to move health care toward what some call a value-based system, but what I might describe in simpler terms as a more relationship-driven health care experience. As I’ve talked to Americans from all over the country and even as I reflect on my own personal experiences, this is one of the most important things we are looking for as patients. We also feel we are losing this—the ability to build relationships with care teams, where a whole episode of our care can be managed end-to-end without abrupt handoffs, and where our doctor knows when something happens to our health and she can connect it to other aspects of our lives.

I’ve had many conversations with physicians over the last year since I made a statement here at JPM that we had lost the hearts and minds of physicians. Many of them say they want to experience the joy of medicine again—to be able to make a living from listening to their patients, coordinating their care, improving their health, and get paid for what works.

Whether you call these ACOs or Medical Homes or Bundled payments frankly doesn’t matter. What matters is that we can develop these innovative practices locally, test them, and spread them.

Converting to a relationship-based system takes work and investment from all parties. We’ve started the process with the broad participation of physicians and patients. Using the CMS Innovation Center, which is part of the ACA, as well as through MACRA, the HITECH Act, and 21st Century Cures, we are making the investments that unlock research, data, innovation and reduce the burdens and distractions that don’t support care. They demonstrate that we can work in a bipartisan fashion on important issues in health care.

Hospitals, clinics, wearable tech companies, big data companies, population health management and other innovators have a big role to play. Patients and physicians want technology and data to support their relationship, not distract from it. I will be talking about this further with a great panel at 6 o’clock in the Colonial Room.

But let me be clear on this. We will not be able to both re-litigate the past and invest in an innovative future at the same time. I’m sure you are beginning to hear this throughout the presentations today. CEOs, CFOs and boards are all meeting and retreating—their purchasing, capital equipment and building are likely to slow sharply in the first half of the year if we are going through the prolonged uncertainty following a repeal vote. This will stand in the way of building the better system we need and that Americans deserve.

In the end, we have a commitment to improve the lives of Americans and pass the baton to the next team. Each morning at CMS, I would check my inbox first thing to read about the problems that beneficiaries would write me about. Sadly, we never solved every single one of them, but we solved many.

That’s the thing that binds Administrations in our system of government and gives me optimism. It’s the 140 million Americans in the Medicare, Medicaid, Children’s Health Insurance and Marketplace programs that we serve. Just as I worked for them, soon, the new team will work for us. I can tell you, at least for me, something changes when you are working directly for the American people with so much at stake. And I will do everything I can to assist the new team in continuing the progress.

On their first day, the new team will be greeted by words that greeted me the first day I walked into the lovely Humphrey building where the Department of Health & Human Services is located. The words say:

“The moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life, the sick, the needy, and the handicapped.”

Look at our before-and-after picture from a little bit of a distance. Before Medicare and Medicaid, one in three seniors lived below the poverty level. Picture that. One in three of our seniors lived in poverty. Today, that’s fewer than 1 in 10.

Today, thanks to Medicaid and CHIP, 95 percent of children in this country have health insurance. We are holding to the promise we have made to all Americans that as you get older, or if you have a disability, you will be able to access care and your family won’t go broke in the process. And, with the ACA, we have extended that promise of care to include all Americans regardless of their employment, their health status, or their income.

Through this transition, we must continue to work together in the private and public sector to continue to hold to these commitments and improve on them. And we must make sure the conversation around any coming changes in American health care reflects the gravity of their impact on millions of Americans.

Thank you. And now, I’m happy to take some questions.


Addressing the Opioid Epidemic: Keeping Medicare and Medicaid Beneficiaries Healthy

By Shantanu Agrawal, MD, Director, Center for Program Integrity and
Kate Goodrich, MD, MHS, Director, Center for Clinical Standards and Quality

“The opioid epidemic is one of the most pressing public health issues in the United States today.”
– Health and Human Services (HHS) Secretary Sylvia Mathews Burwell

Many Medicare and Medicaid beneficiaries and their families have been affected by the consequences of opioid misuse and opioid use disorder, commonly referred to as addiction. Given the growing body of evidence on the risks of misuse, highlighted by the Centers for Disease Control’s (CDC) new guidelines for prescribing opioids[1] that was released earlier this year, and the Administration’s commitment to combatting the opioid epidemic, CMS is outlining our agency’s strategy and the array of actions underway to address the national opioid misuse epidemic.  The actions outlined here do not include CMS’s vision for the treatment of cancer and hospice patients. Treatment of patients in these situations require careful medical supervision based on therapeutic goals, ethical considerations, and the balance of risks and benefits of opioid therapy.

Opioids are a class of drugs that can treat both acute and chronic pain. These prescription medications, including hydrocodone, oxycodone, fentanyl, oxymorphone, and morphine, can have benefits for many patients with serious pain, but in recent years we’ve seen increasing examples of their potential to cause serious and substantial harm. Opioids are potent pain medicines[2] that can cause potentially fatal central nervous system and respiratory depression[3], and their high potential for misuse[4] has led to alarming trends of opioid misuse, use disorder, and overdose across the United States.  Those who engage in non-medical opioid use are at an elevated risk for future heroin use[5], exposure to diseases like HIV and Hepatitis C through injection drug use[6], unintentional overdose, and death[7].  These patterns can be observed across all socioeconomic groups and geographic areas, and the statistics are staggering.  In 2009, deaths from drug overdose, including those related to prescription opioids and heroin, surpassed motor vehicle crashes as the leading cause of injury death in the U.S., and numbers have continued to rise. In 2015, opioids, including prescription opioids and illicit opioids such as heroin, killed more than 33,091 people.

Underlying these alarming statistics is a dramatic increase in opioid prescribing. The number of opioid prescriptions written each year has quadrupled in less than two decades, yet pain reported by Americans has not changed during that time period.[8] Now, after two decades of increasing prescriptions, there are nearly two million Americans in the United States with opioid use disorder.  The Medicare population has among the highest and fastest-growing rates of opioid use disorder, currently at more than 6 of every 1,000 beneficiaries[9]. For Medicaid beneficiaries, the prevalence of diagnosed opioid use disorder is even higher, at 8.7 per 1,000, a figure which is estimated to be over 10 times higher than in populations who have private insurance coverage[10].  Recognizing the seriousness of the opioid crisis, the U.S. Surgeon General recently alerted 2.3 million health care practitioners to the scope of the problem and urged them to visit to join the movement to help end the opioid epidemic.

As part of the HHS Opioid Initiative launched in March 2015[11], CMS has made addressing this devastating epidemic a top priority.  Building upon the Administration’s priority of addressing the opioid epidemic and the HHS Initiative and its three priority areas, the CMS effort to combat opioid misuse and opioid use disorder in our programs focuses on four priority areas:

  • Implement more effective person-centered and population-based strategies to reduce the risk of opioid use disorders, overdoses, inappropriate prescribing, and drug diversion;
  • Expand naloxone use, distribution, and access;
  • Expand screening, diagnosis, and treatment of opioid use disorders, with an emphasis on increasing access to medication-assisted treatment; and
  • Increase the use of evidence-based practices for acute and chronic pain management.

The success of this strategy depends upon CMS effectively communicating with everyone who interacts with Medicare and Medicaid.  We are working with Medicare and Medicaid beneficiaries, their families and caregivers, health care providers, health insurance plans, and states to improve how opioids are prescribed by providers and used by beneficiaries, how opioid use disorder is identified and managed, and how alternative approaches to pain management can be promoted.

Reaching out to Beneficiaries

Reaching patients is vital. CMS wants beneficiaries, their families, and caregivers to know what opioids are, the risk associated with their use and the role opioids may play in pain management.  Our primary aim is to ensure that patients, their families, and caregivers have a better understanding of how to work with providers to identify treatment goals and successfully manage pain using current, safe, effective, and accessible treatments; for many patients this may not include an opioid.  If opioids are an appropriate part of treatment, we want to ensure that beneficiaries and those around them are educated on the risks associated with opioids, including overdose, how to recognize it, and how to respond if an overdose occurs.  Education will extend to opioid use disorder and how to identify common signs and symptoms, and how to help individuals who have developed an opioid use disorder access evidence-based treatment and recovery support services.

Helping doctors and other health care providers

For physicians and other clinicians, CMS is focused on advancing the most up-to-date, evidence-based best practices. CMS is raising awareness of current guidelines for appropriate prescribing (e.g., the CDC Guideline for Prescribing Opioids for Chronic Pain), so providers offer each beneficiary the safest and most effective combination of treatments for their pain.  The CDC Guideline includes recommendations focused on the use of opioids in treating chronic pain (pain lasting longer than 3 months or past the time of normal tissue healing) outside of active cancer treatment, palliative care, and end-of-life care.  CMS is also promoting resources and programs that support providers, such as training on medication-assisted treatment, methods for screening and tracking patients at high risk for an overdose, and policies regarding naloxone availability and use.

CMS also finalized a policy in November 2016[12] that removes the pain management dimension of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey from the Hospital Value-Based Purchasing program to eliminate any perceived financial pressure that clinicians might feel to overprescribe opioids.  We are continuing to research this issue and develop alternative survey questions, which will focus on provider communication about pain.  CMS continues to require reporting of the current HCAHPS pain management questions for purposes of the Hospital Inpatient Quality Reporting Program, with the results reported on Hospital Compare.  We believe this strikes the balance of ensuring that patients’ pain is treated appropriately, without the unintended consequences of encouraging inappropriate use of opioids.

Working with health plans

CMS is coordinating with private insurance companies to ensure that their policies are consistent with and supportive of Medicare’s efforts for patients and providers.  As an example, CMS is helping to increase access to naloxone by requiring that this opioid overdose reversal medication be included on all Medicare Part D and Marketplace plan formularies. CMS also currently employs an Overutilization Monitoring System[13], which assists and Part D Drug Plan Sponsors in identifying Medicare Part D beneficiaries with potential opioid overutilization.  Plan sponsors review each at-risk beneficiary’s case and provide the results to CMS to demonstrate that they have established reasonable and appropriate drug utilization management programs.

In addition, as part of its response to a Memorandum from President Obama[14] requiring Federal Departments to address barriers to opioid use disorder treatment in Federal programs, in the CMS 2017 Call Letter to plans participating in the Medicare Prescription Drug Program, the Agency reiterated that reducing the unsafe use of opioids is a priority and made clear that Part D formulary and plan benefit designs that hinder access to medication-assisted treatment for opioid use disorder will not be approved.  CMS also released a guidance document to States identifying “Best Practices for Addressing Prescription Opioid Overdoses, Misuse and Addiction” including effective Medicaid pharmacy benefit management strategies, steps to increase the use of naloxone to reverse opioid overdose, and options for expanding Medicaid coverage of and access to opioid use disorder treatment.

As other federal agencies’ responses to the opioid epidemic progress, CMS will continue to update health plans on CMS policy.

Working with states

CMS is also working with states to address substance use disorders, including opioid use disorder, among Medicaid beneficiaries. In 2014, CMS launched a substance use disorder initiative through the Medicaid Innovation Accelerator Program (IAP)[15]. This program area supports six states’ efforts to design, plan, and implement strategies to improve their substance use disorder treatment delivery systems.

In 2015, CMS also issued guidance describing a new section 1115 demonstration waiver opportunity[16] designed to support states to provide more effective care to Medicaid beneficiaries with a substance use disorder, including the ability to provide treatment services not otherwise covered under Medicaid. Through the Medicaid IAP, CMS has been working with a number of states to develop comprehensive benefit, practice, and system reforms through section 1115 demonstration  proposals, including targeted strategies to address opioid use disorder and prescription drug misuse. The IAP also helps states assess the availability and quality of medication-assisted treatment, and develop ways to pay for substance use disorder treatment services that have been shown to produce better outcomes. CMS is helping to analyze the results of this program and is maximizing its potential impact by communicating successes and lessons learned across states.

States may apply to SAMHSA to use funding authorized in the 21st Century Cures Act[17] to support opioid use disorder treatment for un-insured and underinsured patients[18].

Working together for healthier people

CMS is committed to high quality care, including appropriate pain management.  In order to best fulfill that commitment, we need to modify trends in opioid prescribing, use, misuse, and overdose, and increase support services to help individuals recover from opioid use disorder, as well as provide the full spectrum of evidence-based practices for acute and chronic pain management.  We will continue our strong collaboration with community stakeholders, HHS agencies, and across government.  We are focused on making a real, positive impact in the lives of our beneficiaries.

CMS’s strategy for addressing the opioid epidemic is available on our website.  We welcome input from clinicians, patients, consumers, caregivers, manufacturers, researchers, and others to enhance our response and maximize the effectiveness of our activities.  Millions of America’s older adults, low-income families, people with disabilities, and many others count on Medicare and Medicaid to keep them healthy. It’s our job to make sure these programs live up to this commitment, including being proactive by partnering to help curb one of the greatest public health challenges of our time.

CMS is committed to supporting opioid abuse efforts within federal, state, and public sector domains. The strategies outlined within this paper align with the Secretary’s initiative and the Surgeon General’s report, and also work in tandem with private payer initiatives, “Letter to Issuers” releases, beneficiary awareness communications through print and media and many other works.  In the coming weeks, CMS anticipates the release of statements reflecting the agency’s Medicare and Medicaid goals, as well as priority work in collaboration with private payers.



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Transforming Health Care Delivery through the CMS Innovation Center: Better Care, Healthier People, and Smarter Spending


By Dr. Patrick Conway, Acting Principal Deputy Administrator and Deputy Administrator for Innovation & Quality

Transforming Health Care Delivery through the CMS Innovation Center: Better Care, Healthier People, and Smarter Spending

We have made great progress in recent years on reforming our system into one that delivers better quality of care for patients and pays for care in a smarter way, including investing more in prevention and primary care.

Before 2010, there had been only modest efforts to improve care and reduce costs. Medicare – the country’s largest health care insurance program – was largely paying for health services based on volume – where providers were paid for every service they ordered or performed – which didn’t necessarily improve the health of beneficiaries or preserve the program for future generations. To improve our health care system, the largest payer of health care stepped up to partner with providers, doctors and other clinicians, states, private payers, consumers, and others to spur innovation. The market and people in communities across the nation have responded this initiative in extraordinary ways and delivered better care to patients.

This has been the mission of the Center for Medicare and Medicaid Innovation (CMS Innovation Center), to align incentives, partner with others to improve the health system, and implement best practices for coordinating patient care. Since opening its doors in late 2010, the CMS Innovation Center has worked tirelessly to enhance the quality of health care delivered while not increasing costs for Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) beneficiaries. The CMS Innovation Center takes locally-driven approaches – approaches from doctors and other health care partners providing care to patients every day – and gives them the platform to be tested through a collaborative process.

Today, based on the successful work of the CMS Innovation Center and countless public and private sector partners, we can now say that health care delivery system reform addressing both quality and cost has become part of the fabric of Medicare, Medicaid, and the health care sector nationwide. According to a new report to Congress prepared by the CMS Innovation Center:

  • Over 30 new payment models have been launched over the past six years
  • Investments in electronic medical records and a data and analytics infrastructure are sparking a new set of innovative companies.
  • The CMS Innovation Center’s portfolio of models has attracted participation from a broad array of health care providers, states, payers, and other partners. An estimated 18 million individuals, including CMS beneficiaries and individuals with private insurance included in multi-payer models, have been impacted by, have received care, or will soon be receiving care furnished by more than 207,000 health care providers participating in CMS Innovation Center payment and service delivery models and initiatives. These models are delivering care to people in every state across the nation.
  • Medicare exceeded – earlier than predicted – the goal to tie more than 30 percent of fee-for-service payments by the end of 2016 through alternative payment models to quality and cost metrics. Medicare is on pace to reach 50 percent by the end of 2018.

The Innovation Center has partnered with Medicare, Medicaid, and private health plans in the commercial market on new models of care and innovation. And, a number of exciting initiatives will be coming to more beneficiaries over the next few years:

  • The Medicare Diabetes Prevention Program expanded model, set to begin in 2018, will pay for services to prevent the onset of diabetes to all eligible Medicare beneficiaries, improving their health and that of the Medicare program both now and in the future.This is important because we estimate that Medicare spent $42 billion in 2016 on fee-for-service, non-dual eligible, over age 65 beneficiaries with diabetes.
  • Three new payment models—the Acute Myocardial Infarction Model, the Coronary Artery Bypass Graft Model, and the Cardiac Rehabilitation Incentive Payment Model—will support clinicians in providing care to patients who receive treatment for heart attacks, heart surgery to bypass blocked coronary arteries, or cardiac rehabilitation.
  • Through the Comprehensive Primary Care Plus Model, primary care doctors can care for their patients the way they think will deliver the best outcomes, and they’ll get paid for achieving results and improving care.
  • One new payment model—the Surgical Hip and Femur Fracture Treatment Model—will support clinicians in providing care to patients who undergo surgery after a hip or femur fracture beyond hip replacement. In addition, we finalized updates to the Comprehensive Care for Joint Replacement Model, which began in April 2016.
  • The Accountable Health Communities Model, beginning in 2017, will test whether increased awareness of and access to services addressing health-related social needs will impact total health care costs and improve health and quality of care for Medicare and Medicaid beneficiaries in selected communities. This model will address a critical gap between clinical care and community services in the current delivery system.
  • Thirty-eight states and territories are engaged in the State Innovation Models initiative where they are testing their own best ideas to improve health, quality of care, and lower costs. Additionally, Vermont and Maryland have entered into global payment arrangements to improve care for the whole state’s population.
  • And, already, investments in patient safety from the CMS Innovation Center, including through the Partnership for Patients, have contributed to an estimated 125,000 lives saved, over 3 million infections and adverse events avoided, and $28 billion in savings. We expect to see these numbers and savings continue to grow in the coming years.

These exciting approaches are the result of careful design, thorough and rigorous evaluation, and close collaboration with patients, doctors, and other stakeholders to achieve real, measurable, and significant results in improving health and lowering spending. CMS conducts an independent evaluation of every CMS Innovation Center model and releases those findings publicly. These reports provide stakeholders with information on the impact of the model as a whole on health care expenditures and utilization, beneficiary and health care provider experiences with care, and, where feasible, health outcomes. The reports also often provide site-specific results.

Using the CMS Innovation Center to advance better, smarter health care has become even more important over time. Since the passage of the bipartisan Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the CMS Innovation Center has been instrumental to its implementation. The Quality Payment Program, which implements provisions of MACRA, includes a five percent incentive payment for physicians and other clinicians sufficiently participating in Advanced Alternative Payment Models. The CMS Innovation Center is the mechanism to create new Advanced Alternative Payment Models in the future. In fact, the CMS Innovation Center has recently announced more than five new or re-opened opportunities for clinicians to join Advanced Alternative Payment Models. CMS expects 125,000 to 250,000 clinicians to be participating in Advanced Alternative Payment Models by 2018. The CMS Innovation Center looks forward to partnering with doctors, clinicians, patients, and others on new models.

The CMS Innovation Center continues to work on behalf of current and future Medicare, Medicaid, and CHIP beneficiaries. After more than six years, the health care system is objectively safer while making Medicare more financially secure for future generations. Such significant progress is possible because we have worked with Congress and stakeholders to listen, adapt, and advance proven ideas. Our work in developing and expanding new payment models will continue to be guided by the following core principles:

  • Supporting innovative payment and service delivery models with strong potential to improve health care quality and lower costs.
  • Engaging with and listening to consumers, providers, and other stakeholders allowing for open and transparent dialogue, including through the appropriate use of notice-and-comment rulemaking and ombudsmen.
  • Evaluating results based on appropriately scoped and sized demonstrations and advancing best practices based on their impact on quality and cost.

Together we can continue to strive to achieve better care, healthier people, and smarter spending.

To read more detail of the accomplishments of the CMS Innovation Center, read the most recent biennial report to Congress on the Innovation Center website:


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Remarks by Andy Slavitt: Building on the Nation’s Progress in Health Care

Below are prepared remarks by Andy Slavitt, CMS Acting Administrator before the Citi Global Healthcare Conference on December 8, 2016

It’s great to be with you here this morning as we look forward to the final 45 days in what has been an incredible period of progress in working to improve and deliver care for millions of Americans. It is obviously an interesting period with some big open questions as the new Administration moves from campaigning into governing mode. As a country, it’s good for all of us to move past the rhetoric.

Today I will look at three important national policy areas. I don’t have a crystal ball, but I will tee up some areas of policy likely to be a major focus in the near term that will have a significant impact on how our health care system– and how our economy — functions: any changes to the Affordable Care Act (ACA), Medicaid and drug costs.

I will say at the outset that even with policy differences, my primary responsibility is to help execute the best transition possible so that the President-elect’s health care team has the greatest likelihood of success. The commonality of our responsibility is the 140 million Americans covered by Medicare, Medicaid, CHIP, and the Marketplaces– many of whom live on low or fixed incomes and when they need the health care system, they don’t have the luxury of focusing on politics.

Before I talk about how to carve a path forward in these three different areas, I want to first assess where we are in terms of delivering for those people, for taxpayers, and for the country as a whole. After a long period of years preceding the ACA, which had record levels of people without insurance or access to care, unsustainable medical cost trends and poor quality health, it’s clear things have changed. There hasn’t been a greater stretch of progress in our nation’s health care system, as we’ve seen in the last eight years. There’s never been this level of progress.

  • The US is currently experiencing a record 74-month streak of job growth. The unemployment rate is at 4.6%. In November alone, the US gained 178,000 jobs – and nearly 30,000 were in health care. About two million jobs have been added in the health care sector since the ACA.
  • We are covering more Americans: Over 20 million new people have been newly covered and the uninsured rate under 9%.
  • We are making advances in quality: It is now objectively safer to use the health care system than it was eight years ago because of the tools in the ACA. Across the country, people are getting higher quality care with 95% of national quality metrics improved over the last eight years.
  • We are bending the cost curve: Medicare cost trends have averaged under 2% rate of growth compared to just under 6% the previous eight years, and a decade has been added to the life of Medicare’s trust fund.
  • We are also advancing innovation: Medicare has become the leader in alternative payment models with over 30% of payments now going through models that pay for value. Thirty new payment models have been scaled over the past six years, and investments in electronic medical records and a data and analytics infrastructure that is sparking a new set of innovative companies.
  • And, what it’s all about in the end: Making real gains in the lives and the health of people. Record numbers of people report being able to see a regular physician. Record numbers report being satisfied with their care, and now able to afford to fill their prescriptions. Medical bad debt is at all-time lows and that’s true for both patients and for hospitals.

It’s been a rich period of growth and innovation in health care. The health care private sector has flourished during the President Obama years. Even as we have bent the cost curve and gotten more efficient, health care companies have outperformed the broader market, which itself has more than doubled since the ACA.

If you had invested $1 million in the health care index at the start of the ACA, by the time of the election on November 8, you’d have outperformed the broader S&P by 15% or have $320,000 more than, if you’d invested in the broader S&P 500. There was high performance in all sectors of the health care economy:

  • Managed care outperformed S&P by 120%;
  • Health IT beat by 83%;
  • Medical devices beat by 4%;
  • Hospitals beat the S&P by about 11%; and
  • Even large pharmaceuticals and biotech, despite significant underperformance in the second half of 2016, matched the market in the case of pharmaceuticals; and biotech beat it by 64%.

If you look past the partisanship and sensational headlines, while it doesn’t always feel like a smooth path at the time, the Obama formula of public-private partnership has covered more Americans, reduced the deficit, bent the cost curve and, in the private sector, supported the creation of hundreds of billions of dollars in new market capital and hundreds of thousands of new jobs.

One of the critical questions we face now is whether we will build on the progress that we have made by focusing on improving the areas that need it or whether the new Administration will seek a wholesale do-over by repealing the ACA without a plan passed to move forward.

Let me be clear in saying this first. There should be no pride of authorship in improving the ACA. If we can improve upon the things that were started, we should do it. It doesn’t matter if it comes from a Democrat or a Republican. We should all have a rooting interest in more progress, and all the better if it’s bipartisan.

The American people are certainly going to judge any plan based on what it accomplishes. There are four tests any new plan will have to meet:

  1. Does it improve access? Today, we have record low uninsured. We would welcome any plan that covers more people this Open Enrollment. We have seen millions signing up for new coverage at a record pace that exceeds last year. Any plan that increases that will be welcome.
  2. Does it keep people protected? From the point of view of someone recovering from an opioid addiction or who has a past cancer diagnosis or who wants access to free preventive care or worries about annual and lifetime caps, does this plan protect those individuals as well as they are protected now? Poll after poll shows that these protections, lifetime caps, no denials for pre-existing conditions, are vital to the American people.
  3. Will it be more affordable or will it increase costs? Today 70% of eligible Americans can find insurance through the Health Insurance Marketplace for what they consider the magic number for affordability– $75 a month with tax credits. Seniors save thousands on prescription drugs from the donut hole being reduced and are gaining access to medical homes and diabetes prevention. These are all reducing future costs to our program by keeping people healthier now.
  4. Is it fiscally responsible? Remember the ACA extended the life of Medicare by a decade and has helped save $473 billion while the deficit is being reduced throughout the country and projecting to cost $2.5 trillion less than original estimates.

If any plan or amendment can meet these tests of improving the ACA, we should all embrace any improvements no matter which party they come from. Since the election has settled, polls are now showing that the majority of people, no matter who they voted for, want to build on where we have started, and not start over with a repeal. Some recent comments from Congress have begun to show a recognition of this reality, with the Speaker recently saying that people are going to be no worse off at least with a change — and that would be a good place to start.

But, if there is no plan developed to replace the ACA whatsoever, it would be a significant mistake to repeal the ACA with a delayed implementation with hopes of developing a plan later. All of which would put us in a great deal of uncertainty. This so-called repeal-and-delay would turn into repeal-and-chaos for consumers, for providers, for payers, and for investment dollars.

Health insurers have to begin making decisions around their market participation just a few months from now. Without active support of the program and little clarity about the future of the mandate, prices would go up dramatically as number of health plans will significantly reduce their participation or drop out. Millions would lose coverage– tens of millions by some estimates– and bad debt would increase across the health care system again.

This, along with the contemplated repeal of Medicaid expansion, would cause significant hardship for hospitals that, in just the first year of ACA implementation, saw uncompensated care costs reduced by $7.4 billion. Earlier this week, the hospital systems estimated that repealing the Affordable Care Act could cost them over $165 billion by the middle of the next decade and trigger, quote, “an unprecedented public health crisis.”

Now, hospital and health plan CEOs are going on record publicly urging that there be no delay between repealing the ACA and delivering the details of a new plan, with many privately saying that they will be forced to contract, drop coverage, reduce service lines, and reduce participation in value-based models.

And, while I haven’t yet seen reliable estimates on job losses with this approach, they could be significant considering that 2 million health care jobs, many of them in small communities around the country, have been added since the ACA. A report yesterday from the Urban Institute estimated yesterday that 30 million people would lose coverage under a repeal, and it would be easy to imagine a significant number of job losses.

This leads into the second critical choice we face, which is how we will fund significant government programs. And, in the very near term, the conversation will shift to the Medicaid program. There will be differences of approach to Medicaid, with continued emphasis placed on state innovation waivers and the new Administration will bring their own approaches to the parameters, of those waivers. There will be philosophical differences in those parameters but I’m not going to focus on those here.

The significant question is what would be the impact of cuts to Medicaid funding by moving to a “block grant” Medicaid funding. Now you may hear terms like block grants or caps to Medicaid discussed. These are decades-old ideas and just to be clear these are cuts. In conversations about cutting or capping Medicaid, it’s first important to start with what Medicaid is today because there are many misconceptions.

  • First, half the nation’s births are covered by Medicaid. And, about half of the country’s children (over 45 million) are covered by Medicaid and CHIP;
  • Half of the long-term care we provide in this country to our seniors is covered by Medicaid;
  • Over 40% of Medicaid covers care for people living with disabilities, which tomorrow could be anyone of us or anyone in our community;
  • And, Medicaid is vital to rural communities, driving down the uninsured rate significantly in states with rural populations who have expanded coverage.

Cuts to Medicaid will ripple across the country – from small rural hospitals and health centers that struggle to get by to large county health systems that are in urban areas.

As we look at the Medicaid program, its fiscal health is a top issue for state governors. But with the help of the private sector, per capita Medicaid costs have become more controlled and predictable than when block grant discussions first began several decades ago. The good news is that the Medicaid program has undergone significant fiscal reform with the growth of capitation and managed care to now three-fourths of the entire program. Today, Medicaid is highly efficient relative to the rest of the care we consume. It costs less than commercial insurance on a per capita basis and delivers more. So, as we have an informed debate about Medicaid, it’s important that we not ignore the progress we’ve made or the impact of undoing it.

The driving concerns in Medicaid are not best dealt with by cutting benefits to kids, seniors, or people with disabilities, but by focusing on things that are really driving its costs like drug costs – the most significant cost concern right now for both states and the federal government, not to mention commercial payers and employers.

Now, on drug costs: Let’s start with this. Yesterday, the Senate signed the Cures legislation and sent it to the President’s desk. In it contained seed funding for the Cancer Moonshot initiative, championed by the Vice President. I was proud to be part of the Vice President’s Cancer Moonshot task force.

While the promise of great cures is around the corner, the costs are risking making these cures out of reach for millions of Americans and it’s become the number one financial issue.

  • Total prescription drug spending in 2015 was about $457 billion or 16.7% of health care spending.
  • Based on recent trends, we’re currently projecting average annual increases of 6.7% through 2025.
  • Part B drug spending doubled between 2007 to 2015, and Part D costs increased 8.4% between 2013 and 2015.
  • Specialty drugs are a big part of the equation. In 2014, they accounted for 31.8% or spending despite representing only 1% of prescriptions.
  • However, it’s not just the specialty drugs. If you look at the 20 drugs with the highest per-unit cost increases in Medicaid, seven were generic drugs. Those products had increases in price ranging from 140% to nearly 500% between 2014 and 2015.

We need sustainable costs so people can afford their care. What we see when drug prices rise, is families and state governments can’t afford it. And cost increases have been pervasive. EpiPen, so much in the news, wasn’t even in the top 20 increases in Medicaid. Top CEOs will tell you they want a sustainable path.

Taking on drug costs will require a lot of stamina because it’s a major issue, but costs are quickly becoming hard to ignore both for the American people worried about their next prescription and for the nation.

As we sit here today, we should both be proud of the progress we’ve achieved and cognizant of the challenges that remain. There are things that need to be improved. But, attempting to over-correct would be a mistake. Frankly, we can do better than to put nearly 20% of our economy in a state of suspended animation and millions in a state of uncertainty. As we’re doing our jobs, one of the things I’ve been cognizant of is minimizing uncertainty because we have nearly 20% of the economy in our balance. Companies have been able to succeed because they can plan.

The good news is we have don’t have to take a step back. As we move past the rhetorical shots at this and that, we have the capability now to tackle the challenges to the health care system and build on the progress that has begun. There is the opportunity for bipartisan agreement that we were not able to achieve over the last 8 years. There’s an opportunity to take the gains begun under payment reform, coverage and quality and allow the private sector to continue to lead the way to providing care for all Americans.

As I close, I’ll just share an insider secret – because it’s literally about the inside of the HHS building, where I go to work every day, what the new Secretary and my successor will see every day … and in 45 days I will walk past it for the last time in my current role. Inscribed in the Hubert Humphrey building is a quote from Hubert Humphrey himself, which says:

“The moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life, the sick, the needy, and the handicapped.”

We are now at a point in our country’s history today:

  • Where 95% of children in this country have health insurance; in 1997 this was only a little over 85%;
  • Where Medicare continues to deliver on its promise to all Americans that as you get older, or if you have a disability, will be able to access care and our family won’t go broke in the process.
  • Where, before Medicare and Medicaid, one in three seniors lived below the poverty level. Picture that. One in three of our seniors lived in the poverty level. Today, that’s less than 1 in 3.
  • Where since the ACA, we’ve seen coverage rates jump for people who were living below the poverty line.

We must continue to work together — private and public sector, non-profit and for-profit to continue to move on the path to progress that has begun. It has been an honor to step out of the private sector to be a part of solving these vexing problems in a different way these last few years, and I’m confident if we work together, our progress will continue. Thank you.

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