CMS Acting Administrator Comments before the National PACE Association

Below are the comments as prepared for delivery of CMS Acting Administrator Andy Slavitt at the National PACE Association on April 5, 2016, @aslavitt

Good afternoon. I want to thank you for having me here and I hope you have had, and have, productive meetings here in Washington. I want to talk today about some of the essential changes for our health care system over the next number of years as we move to the next chapter of the implementation of the ACA and this is the perfect audience to do it. Six years ago, prior to the ACA, our health care system was not doing the job for the people who needed it the most.

Health care spending was growing well in excess of inflation virtually every year — and as costs continued to increase without limit, neither the quality we experienced as patients nor the quantity of people covered was getting better.

It’s not as if well-intended people weren’t working on solutions– to the contrary, in each and every quarter people were tackling part of the issue — the “quality” community; the “drug innovation sector”, the “tech” sector; health plans an array of other interventions; pilot programs and legislation here and there . . . But for all the work — the national results never improved because we couldn’t address issues or patients comprehensively as a Nation.

The passage of the ACA disrupted our trajectory as for the first time in many years there became no such things as business as usual. As a nation, we began to collectively move the health care system in a new direction. And over the last 6 years, we have begun a new chapter marked by significant gains.

  1. We started offering more people the opportunity for coverage, and the hunger was real. 20 million Americans have since gained coverage; the uninsured rate is now lower than 10% and if more states expand Medicaid, millions more would have the security of coverage.
  2. Quality outcomes have moved in larger increments than ever before. With the ACA, we used the tools to reward for higher quality outcomes, and since then, unnecessary hospital admissions are down, 95% of quality metrics have improved nationally and hospital safety has improved by 17%, saving 87,000 lives in the process. 
  3. And medical cost trends are rising at their lowest level in 50 years, at the level of broader inflation measures. The CBO estimates that the ACA is coming in 25% under budget and making an impact on both deficit reduction and on the life of the Medicare Trust Fund.

What is most striking about these national improvements in cost, quality, and access to care since the ACA is that none of these measures had improved in decades. So why have we made this progress and how will it continue? I think it has as much to do with how we react to and implement the law as the law itself; how we keep pressing forward for better and better results.


While we have made tremendous progress, there is still much to be done. We know we need to make care sustainably affordable. Our commitment to quality must become imbedded and we must find ways to reach all the people that are still left behind and left out of the system. As I think about all the work left to be done… we are now trying to evolve the broader system closer toward the principles that have driven PACE for decades by treating people and their needs comprehensively, patient by patient, community by community.

That comprehensive view of care that is a hallmark of the PACE program is a strong example of what we need as a nation. As you know better than anyone, delivering care that accounts for the entire needs of the patient is not simply an operational change; it requires a different way of thinking and we need to get on that path across all sectors where a patient gets care.

So as we enter our next chapter of health care reform, there are three important ingredients that will be critical in shaping our success.

  1. First, when we say patient-centered or consumer-driven, it has to mean something that improves, empowers and engages the life of the consumer.
  2. Second, we need to support what we value. Being treated for all your symptoms is preferable to being treated one off. Your doctor’s office is preferable to an emergency room. Being treated in a comfortable setting — at home or in the community is often better than an institution. Managing a chronic conditions is preferable to neglecting it. High-priced technology or medication is no replacement for understanding and managing a patient’s needs. And prevention is best of all.
  3. And third, our moral commitment must be as strong as our financial one.

As I look at the PACE program and all that it represents, I believe you can show us the way.

The Consumer

In order to put meaning behind a truly consumer-oriented health care system, we first must have a renewed understanding for who we as a country are taking care of and what their needs are. The health care consumer is more diverse, more mobile and more demanding than ever before. CMS now serves — 140 million Americans– most on fixed or low incomes live in every type of care situation–

–they are Medicare patients leaving the hospital with five prescriptions to fill and not sure how to pay for them, but keeping them at home depends on the quality of the transition they make;

marketplace customers who have coverage for the first time and are finally be able to look after conditions they have long ignored. They will bear the cost of every inefficiency and everyone’s margins in their premiums and deductibles and will be a vital weathervane to affordability;

–they are daughters and sons who have to make the difficult decisions on how to care for their parents who are losing their independence and need more and more assistance. They want to understand their options for both home and institutional care and how quality, staffing, cultural commitment and their budgets will impact what is most personal to them;

–and they are parents of children with disabilities that require 24 hour care who spend their lives watching every dollar and interviewing every home care worker.

There are millions of us in a wide diversity of circumstances, but each of us are hoping for the same basic things from the health care system: to intersect with a care system that understands us and provides quality care; to make sure we have access to care we can afford, and when a loved one is sick, to understand what comes next and be able to get them home and productive and with as healthy a life as possible.

The great question, of course, is how we – as a country – are set up to meet those needs, particularly as our country ages, grows in diversity, and as our health needs become more complex.

On Lok

And this really hit me when I had the privilege to visit On Lok in San Francisco last year. What I saw was something familiar to you.

  • The typical person cared for is 83 and has 19 medical diagnosis
    • 59% have Alzheimer’s or dementia
  • The vast majority speaking a language other than English and
  • 90% of the patients are dually eligible.

What I saw at On Lok was a staff that was caring, a kitchen which prepared a diverse set of ethnic meals, vans that brought people in from all over the city to an array of activities, and an interaction with family caregivers in what appeared to be an extension of the family. And I thought to myself . . . wow. For our highest need patients, we can make it work. But to do so, the institutions that make up our health care system will need to compete on how best to solve real life problems for real life consumers and build real relationships. It’s a model the health plans, hospitals, clinics, and government institutions would be wise to pay attention to.

Supporting Value

It leads to my second ingredient of what’s essential in our next chapter of reform– how we support the delivery of the kind of care we want— high value and with a focus on smarter spending and keeping people healthier. To be crystal clear, it’s all of our jobs to allow us to afford all the high quality care we as Americans will need.

Nowhere is this more apparent than when I look at how we care for the elderly and how we afford the care our seniors will need.  According to the Medicare actuaries, we have extended the life of the trust fund since the ACA passed by 13 years—to 2030 by which time we will have twice the number of seniors as in 2000 and the number of Americans over 85 will double. Already people over 80 comprise a quarter of Medicare beneficiaries. And Medicare spending more than doubles between the ages of 70 and 96. Thought of another way, what a typical family may pay in taxes to support the Medicare and Medicaid programs every year may only cover half of the cost of caring for the oldest of the patients. 

How are we going to meet this national challenge? We need a new set of national solutions—not just more money.  It’s the perfect kind of challenge for our country in this next chapter. And this is where we need innovation to come in and where PACE has an opportunity to establish itself as a part of the national solution.

Our agenda is not to sit back and expect all this change to happen on its own, but to help people succeed. Secretary Burwell last year committed the federal government to change how we pay for care. We announced last month that after being entirely FFS through 2011, now over 30% of Medicare FFS payments are now linked to quality and cost outcomes on track for this to become the predominant payment system by 2018. Behind this commitment, are the actions that support the kind of care patients in this country want and deserve.

  • Investing in prevention as we now move to make community-based diabetes prevention more prevalent.
  • Linking the totality of care for a patient together for an entire episode, inpatient and out, for major treatments like joint replacements and cancer care
  • Improving reimbursements for those who demonstrate quality in everything from home health to patient care to surgical care to hospice
  • Paying physicians for something so antiquated, it’s now innovative– paying physicians to talk to patients, not just to prescribe to them, cut them or use expensive technology
  • Focusing on care coordination and population health. There are now over 475 total ACOs with 30,000 participating physicians serving 8.9 million beneficiaries, or better than one in five around the country. And, 64 representing 1.6 million people, are in 2-sided or full risk models, up from 19 just last year and zero before the ACA.
  • AND– Of course — supporting models that bring investment in care to the people who need it the most— home and community based services, dual eligible demos, and PACE.

And we have made investments to support this change – with hundreds of millions of dollars in technical support and a significant effort in simplifying and supporting integrated care delivery – we have major initiatives aligning quality measures, reducing burden, streamlining technology requests, and providing useful and near-real time data to patients and physicians.


We see payment models not as an end, but rather as a change management tool to help physicians and other clinicians increase communication, coordination and improve patient care.   Incentives alone will never be enough to make the health care system work the way we want it to. Our health care needs are too complex and too interdependent and the interests and needs of patients and the care provider community too diverse and heterogeneous. If we appeal to everyone’s self interest better, we can make a certain amount of progress. But I believe we quickly get stuck. Our next chapter must be driven by leaders with a commitment to success beyond their own organizations.

There are three commitments we need to focus on:

-Last year we released our first-ever Health Equity Plan for Medicare. We are calling for the same level of quality care delivery that are targeted at the needs of populations and are culturally-competent for all races, ethnicities, geographies, and other ethnic, sexual or gender-based minorities. This must be measured and highly transparent and we are putting forward more and better data this month as part of National Minority Health Month. As I have seen when I visited On Lok, this is something you all know how to do if we commit to it.

-Second, affordability is all of our jobs and we need to increase the affordability of medicines and emergency room benefits and the premiums we pay. Leaders around the country must seize the mantle of change to reduce unnecessary costs and unnecessary admissions; reduce waste where they see it, redesign care processes and coordinate patient care to better manage chronic disease.

-Finally, to make progress, we must be committed to overcoming barriers as they arrive and work collaboratively. Models of care – whether PACE or ACO or Medical Home -may all be in iterations of what will ultimately become the most successful models. We are still at the stage where Marketplace plans are still experimenting with how to offer benefits and networks in ways that deliver affordability to consumers, and drug companies are seeking to define and deliver value in new models. If we either give up or retrench in these early innings, we risk seeing our progress slip or becoming outmoded as new solutions develop. Which brings me to PACE.


For the many reasons I described, a locally-based, patient-centered and comprehensive commitment to patients is vital to our future. I believe PACE is a model with great promise and I want to affirm my commitment to cultivating that promise. Over the last five years, we have seen demand grow and we at CMS are committed to providing support for further growth. We are committed to proposing a regulatory update which will assist the path to growing successful. For us, this is aimed at facilitating more interdisciplinary care, increasing operational flexibility, improving access to community-based providers, and improving our enforcement processes. We issued a report to Congress last year on the topic of opening the PACE program to for-profits and facilitating conversions as appropriate. And as you heard from Tim this morning, we are working through options on the PACE Innovation Act and look forward to new opportunities to test PACE-like models for new populations.

But PACE is still a secret and in the minds of the public. The challenge is not simply to grow the program, but to define the brand by educating the public and making PACE a clear part of the solution. We need to collect and report on quality metrics so that we can demonstrate a definite proposition that more comprehensive care will led to both better outcomes and lower overall spending. We will, in concert with the NQF, be pushing aggressively on the quality agenda. This is the key to growth. Second, we need the industry to set the standard in compliance. At this still early stage in the evolution of PACE, bad apples sometimes still define the overall brand, often unfairly. And third is to create the innovation that helps manage the population challenge that we as a country are facing. The cry for high-quality patient-focused services is growing more intense for our parents and ourselves. At full potential, PACE will not only be successful but become one aspect of the solution that solve bigger and bigger portions of our national challenge.


I want to close by saying thank you for all the care you and your organizations provide to our Medicare and Medicaid beneficiaries and their families. I get to wake up every day thinking about the 140 million Americans that today rely on CMS’s programs—Medicaid, Medicare, CHIP, the health insurance marketplace. And I have a public email address so I have learned that many of them wake up every day thinking about me too. As that helps me see, and as you can see, there is a great deal of work to do and it is exciting work because we can all play a role in defining the next chapter. Even as we focus on consumer needs today, as my visit to On Lok reminded me, we need to do the work now to think about the lives of our beneficiaries over the next 20 years, and of our future beneficiaries.

With your help, this next chapter will take what we’ve started and impact people more comprehensively, while building a smarter system that can ultimately sustain our needs as a country. We need your leadership to show us the way and we at CMS are committed to working with you to get there.

Reflecting on Our Journey towards Health Equity

By: Dr. Cara James, Director of the CMS Office of Minority Health

Each April, in recognition of National Minority Health Month, we commemorate past achievements, acknowledge current efforts, and outline our continued journey towards health equity and equality for all. Fifty years ago, our journey included stops in Independence, Missouri where Medicare and Medicaid became law; in Selma and Montgomery, Alabama; and in Washington, D.C. for the signing of the Voting Rights Act and Civil Rights Act.

Since then, there have been many more landmark achievements in health equity. Events such as the publication of the Secretary’s report on Black & Minority Health (the Heckler Report) and the creation of the HHS Office of Minority Health illustrate the increased national attention on the need to address health and health care disparities. The publication of the Agency for Healthcare Research and Quality’s annual National Healthcare Quality and Disparities Report illustrates our commitment to track our progress. The passage of the Affordable Care Act and the enrollment of millions of Americans, including many people of color in health plans, illustrate our continued advancement towards better care and healthier communities.

Five years ago, the Affordable Care Act established three additional offices of minority health within six HHS agencies. While several HHS agencies already had offices of minority health, the Office of Minority Health (OMH) at the Centers for Medicare & Medicaid Services (CMS) was an office newly established through the Affordable Care Act. The principal aim for CMS is better care, healthier people, and smarter spending. To help achieve this aim, the CMS Office of Minority Health ensures that the voices and needs of minority and underserved populations are present in the development, implementation, and evaluation of CMS programs and services. We are dedicated to working on behalf of all CMS beneficiaries, while strategically focusing on racial and ethnic minorities, individuals with disabilities, and Lesbian, Gay, Bi sexual and Transgender (LGBT) minorities. CMS OMH activities include: From Coverage to Care, the CMS Equity Plan for Improving Quality in Medicare, strengthening CMS data collection and analysis, and working across the agency to embed a focus on health equity into new and existing programs and policies.

From Coverage to Care is an ongoing initiative designed to help consumers understand their healthcare coverage and how to access the care they need. Additionally, the CMS Equity Plan for Improving Quality in Medicare is CMS’ first strategic equity plan. Launched in 2015, this equity plan identifies six priorities and provides an action-oriented, results-driven approach for advancing health equity by improving the quality of care provided to racial and ethnic minority and other underserved Medicare beneficiaries. Last month, CMS OMH launched an interactive web based tool for mapping Medicare disparities. The Mapping Medicare Disparities Tool contains health outcome measures for disease prevalence, costs, and hospitalization for 18 specific chronic conditions, emergency department utilization, readmissions rates, mortality and preventable hospitalizations.

We know we cannot achieve health equity on our own. It will take the support of partners from the federal to the community level.  We encourage you to join us on the path to health equity by using the resources discussed in this blog, bookmarking the CMS OMH website, joining our listserv, and of course building on your own health equity activities!


Our Hopes for the Comprehensive Care for Joint Replacement Model

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

Today’s launch of the Comprehensive Care for Joint Replacement Model (CJR) is a major step toward transforming care delivery in Medicare. Why? Because this model looks to improve care and quality for the most common procedures that Medicare beneficiaries have, hip and knee replacements. In 2014, more than 400,000 Medicare beneficiaries received a hip or knee replacement, costing more than $7 billion for the hospitalizations alone. Despite the high volume of these surgeries, quality and costs of care for these hip and knee replacement surgeries still vary greatly among providers. For instance, the rate of complications, like infections or implant failures, after surgery can be more than three times higher for procedures performed at some hospitals than at others.

The model aligns with what matters to beneficiaries—better outcomes for a whole episode of care. The model includes patient-reported outcomes after surgery and incentivizes better care coordination. One beneficiary said it best when she described that what she cared about for her hip replacement was getting out of the hospital as quickly as possible without an infection or complication and then being able to go back to playing with her grandkids and gardening. The model incentivizes a system that aligns with her goals and the goals of so many beneficiaries.

We are excited about the CJR model’s potential to improve the quality and efficiency of care for Medicare beneficiaries, to contribute toward a health care system that delivers better care, spends our dollars more wisely, and leads to healthier Americans.

How will CJR work? About 800 hospitals located in 67 selected markets will be accountable for the costs and quality of related care from the time of the hip or knee replacement surgery through a post-hospitalization period. They will receive target prices for these joint replacement cases at the beginning of each year. The target price represents expected spending for lower joint replacement episodes, including the initial hospital stay for the procedure and 90 days after discharge from the hospital. If patients receive high quality care and spending is less than the target, a hospital may receive an additional payment from Medicare. If their spending is above the target, hospitals may be required to repay Medicare for a portion of the difference.

We expect this incentive to coordinate the services a patient receives before, during, and after surgery will encourage hospitals and clinicians to partner with nursing facilities, home health agencies and other providers of rehabilitation services to provide seamless, high quality care.

We want hospitals to be successful under this model because success means that Medicare’s beneficiaries will receive better quality care. In the run up to today’s launch, our staff individually contacted the program coordinators at all 800 hospitals to offer data and other resources to assist them on this multi-year journey. CMS will continue to collaborate with hospitals and their physicians and other clinicians to provide support and share best practices.

What will beneficiaries notice? First, beneficiaries will continue to choose their doctor, the hospital where they receive treatment, and the type and location of rehabilitation care they receive. If their hospital is a model participant, they will get a letter explaining the model. Patients whose chosen hospital participates in the model should experience improved care coordination. For instance, we expect that nursing facilities will understand a patient’s needs better before that patient is discharged from the hospital.

The CJR model offers a chance for hospitals, doctors, and other providers to partner with CMS in furthering our shared goal of improving the quality of care for beneficiaries undergoing the most common inpatient surgery, lower extremity joint replacements. The model is part of the Administration’s broader strategy to improve the health care system by paying providers for what works, unlocking health care data, and finding new ways to coordinate and integrate care to improve quality.

We are excited to begin this groundbreaking initiative and will work with hospitals, physicians, and other providers throughout the model to ensure they have the tools to succeed and improve upon what they do best: provide high quality, coordinated care to beneficiaries.

For more information about the CJR model, please visit:

Los Impuestos y la Cobertura de Salud: Cinco Consejos al Presentar la Declaración de Impuestos

31 de marzo de 2016
Por: Kevin Counihan, Director General de los Mercados de Seguros Médicos, Centros de Servicios de Medicare y Medicaid

El año pasado, millones de personas obtuvieron cobertura de salud de calidad y a su alcance económico a través del Mercado de Seguros Médicos, y la mayoría se beneficiaron de los pagos por adelantado del crédito tributario de prima para reducir el costo de sus primas/cuotas mensuales. Ya que solo quedan unas cuantas semanas para presentar los impuestos, es un buen momento para darles un recordatorio a los consumidores nuevos y los que renovaron  sobre lo que necesitan saber cuándo presenten sus impuestos.

Para aquellos que volvieron al Mercado de seguros en 2015 para renovar su cobertura o escoger otro plan, el proceso de declaración de impuestos es generalmente el mismo al año pasado. Pero, para las personas que se inscribieron por primera vez para la cobertura del Mercado en 2015 el proceso puede ser nuevo. Todos los consumidores del Mercado deberían haber recibido ya en el correo  el Formulario 1095-A. Este documento incluye información importante que se necesita para completar y presentar una declaración de impuestos.

Los consumidores del Mercado que recibieron los pagos adelantados del crédito tributario de prima están obligados a presentar una declaración de impuestos para reconciliar dicha ayuda financiera. Esto es similar al proceso de reconciliación de los impuestos retenidos de los salarios durante el año, los consumidores reciben un reembolso mayor o menor dependiendo de si los impuestos correspondientes se retuvieron en base a los ingresos reales del contribuyente de impuestos y otros factores.

Es extremadamente importante que los que recibieron pagos por adelantado del crédito tributario de prima reconcilien estos pagos cuando presenten su declaración de impuestos. Las personas que no lo hagan por lo general tendrán un retraso en sus reembolsos, y no serán elegibles para recibir los pagos adelantados del crédito tributario de prima en los próximos años.

Los individuos que tengan cobertura de salud del Mercado u otros tipos de seguro también pueden haber recibido otros formularios adicionales llamados Formulario 1095-B o C-1095 de parte de su empleador, compañía de seguros, o el programa de gobierno que proporciona su cobertura, como Medicare o Medicaid. Los contribuyentes no necesitan incluir esta información a su declaración de impuestos o esperar a recibir el formulario antes de llenar sus impuestos federales, pero la forma debe ser conservada en un lugar seguro con otros documentos importantes de sus impuestos.

Un recordatorio importante: Como la mayoría de los declarantes de impuestos utilizan un preparador de impuestos o el software de preparación de impuestos, la mayoría de los contribuyentes sólo tendrán que responder a las preguntas cuando se les solicite.

Estamos aquí para ayudar. Los consumidores del Mercado que tengan preguntas deben comunicarse con el Centro de Llamadas del Mercado (1-800-318-2596). Recursos adicionales e información también está disponible en o

A continuación, resumimos cinco consejos útiles para los consumidores del Mercado y otros declarantes de impuestos cuando se trata de la presentación de impuestos este año:

Cinco consejos para quienes presentan declaraciones de impuestos

  1. La mayoría de la gente sólo tiene que marcar una casilla: La gran mayoría de los declarantes de impuestos tienen una cobertura que califica (incluyendo la cobertura de un empleador, Medicare, Medicaid u otra cobertura) y sólo tendrán que marcar una casilla cuando presenten sus impuestos para indicar que cada una de las personas en su hogar tuvieron cobertura en el año 2015. Este año, muchos consumidores recibirán en el correo de parte de su empleador, compañía de seguros, o el programa de gobierno que proporciona su cobertura, como Medicare o Medicaid, un nuevo formulario llamado formulario 1095-B o un formulario 1095-C. Los contribuyentes no tienen que incluir esta información con su declaración de impuestos o esperar a recibir el formulario antes de llenar sus impuestos, pero si deben conservar este formulario en un lugar seguro con otros documentos relacionados con sus impuestos. Para obtener más información sobre todas estas formas, visite el sitio web del IRS:
  1. Los consumidores del Mercado deben presentar una declaración de impuestos para reconciliar cualquier pago anticipado del crédito tributario de prima que recibieron para poder mantener su elegibilidad para esta ayuda en el futuro: Todos los consumidores del Mercado deberían haber recibido ya en el correo el Formulario 1095-A. Este formulario incluye información importante que se necesita para completar y presentar una declaración de impuestos. Es extremadamente importante que los que recibieron pagos por adelantado del crédito tributario de prima reconcilien estos pagos cuando presenten su declaración de impuestos. Las personas que no lo hagan por lo general tendrán un retraso de su reembolso, y no podrán ser elegibles para el pago anticipado de los créditos tributarios de prima en los próximos años. 
  1. La multa por no tener cobertura aumentara. Para aquellos que podían costearse un seguro médico y optaron por no obtener la cobertura, la multa por no tener la cobertura mínima esencial en el año 2015 subió hasta un 2 por ciento de los ingresos familiares o $ 325 por persona. La multa se prorratea según el número de meses que una persona no está asegurada. La multa sube de nuevo en el año 2016. Si alguien no tiene cobertura o una exención en el año calendario 2016, pero podría pagar la cobertura, la tasa aumenta a $695 por persona o el 2,5% de los ingresos, lo que sea mayor. Para más información, visite
  1. Algunas personas que no tuvieron cobertura de salud en el año 2015 calificaran para una exención: Mientras que los que pueden costear la cobertura de salud pero optaron por no inscribirse por lo general tienen que pagar una multa, algunas personas que no pudieron pagar una cobertura o cumplen con otras condiciones específicas pueden recibir una exención. Usted puede encontrar más información en línea del Mercado o del IRS en oísicas-y-Familias. 
  1. Hay ayuda disponible. Si la gente tiene preguntas acerca de los formularios de impuestos del Mercado, como se califica para las exenciones, o la multa, deben ponerse en contacto con el Centro de Llamadas del Mercado. El centro de llamadas está abierto todo el día, todos los días llamando 1-800-318-2596. recursos adicionales e información también está disponible en o

The Marketplace Risk Adjustment Program: Promoting Access, Quality, and Choice for Consumers

By Kevin Counihan, CEO of the Health Insurance Marketplaces
Dr. Patrick Conway, CMS Acting Principal Deputy Administrator

This week, CMS brings together health care stakeholders and experts to discuss an esoteric sounding, yet important, topic: the individual and small group market risk adjustment programs created by the Affordable Care Act (ACA).  Risk adjustment is critical to making the ACA’s better-known market reforms work well for insurers and consumers. By reducing incentives for issuers to try to design products that attract a healthy risk pool, risk adjustment lets issuers compete on quality, price, and products that meet the needs of all consumers, protecting consumers’ access to a range of robust options.

Risk adjustment is a longstanding and important part of the Medicare Advantage and Medicare Prescription Drug Programs and has proven effective in making these programs work well for seniors.  Likewise, the ACA’s risk adjustment program is already delivering on its promise of affordable coverage that meets consumers’ needs. But, there is always room for improvement.

That’s why CMS recently released a white paper ( that evaluates our experience with the risk adjustment formula to date and analyzes possible changes. The white paper provides data and analysis about how the program has operated in the past, so that information, best practices, and ideas for improvement can be shared. And that’s why we’re bringing a broad range of stakeholders together to discuss these issues.

As we consider comments and feedback in our meeting on Thursday, March 31, on the future of the ACA’s risk adjustment program, we will keep in mind key principles to simultaneously make improvements while staying true to the goals of the program.

Promoting Access, Quality, and Choice for Consumers with Diverse Health Care Needs

Before the ACA, Americans with pre-existing medical conditions were often left out of the health insurance market. Now, because of the ACA, Americans with pre-existing condition can no longer be charged more or denied coverage just because they’ve been sick.

This means that insurance companies have had to adapt to a new way of working.  Instead of “medical underwriting” – a practice where an insurance company requires you to disclose your health status to determine whether to offer you coverage, at what price, and with what exclusions – insurance companies must offer you coverage regardless of your health status and can’t charge you more for being sick.

Risk adjustment is an essential part of making the individual and small group markets work well under a system where everyone, including people with pre-existing conditions, can buy high-quality coverage.

Through risk adjustment, insurance companies with sicker-than-average enrollees receive payments from other health insurance companies with healthier-than-average enrollees. That means that issuers make or lose money based on the characteristics of the products they offer, rather than how sick or healthy their enrollees are. This, in turn, lets issuers compete in the market by designing products that meet the needs of all consumers, rather than designing products to be unattractive to those who are sick.

For example, thanks to risk adjustment, it can make financial sense for issuers to develop specialized care management programs to meet the needs of people with chronic or other conditions. If such plans attract more expensive enrollees, issuers know they will be compensated by risk adjustment.

We are already seeing some Marketplace plans innovate in this area to meet the needs of consumers with challenging health issues, for example by offering plans that focus on diabetes management and other chronic illnesses. Risk adjustment may also help new or smaller businesses participate in the market without fear of attracting a large number of sick enrollees in any particular year.

Assessing the Marketplace Risk Adjustment Program

The risk adjustment methodology was designed with input from trade associations, insurance companies, actuaries, clinicians, economists, and other members of the public. It was implemented through rulemaking with a public notice and comment period. CMS worked closely with health insurance companies to ensure that the risk adjustment program uses the best available data. And all insurance companies – large and small, new or established – play by the same rules.

The first finding of the CMS white paper is that the risk adjustment program has largely worked as intended to date. For the 2014 benefit year, the formula successfully transferred $4.6 billion from issuers with healthier enrollees to issuers with sicker enrollees.  Our data and an outside independent analysis ( found that the main determinant of whether an issuer received a payment is the relative health of their enrollees, which is a sign of health for the program.

These analyses also show that the formula hasn’t favored large plans over small plans, or the reverse, indicating no bias by the size of the plan or insurance company. We expect performance of the program to improve with experience. Accurate risk adjustment payments depend on issuers accurately collecting, managing, and submitting data on their population’s health. While the ACA-compliant individual and small group markets are still relatively new, these core capabilities appear to have worked well in 2014 and we expect will contribute to successful health plan operation even in a market without risk adjustment.

What’s Next?

We have recently made and announced a number of changes to risk adjustment. In response to issuers’ requests for earlier information, we distributed risk adjustment data reports to insurance companies earlier this month to help them with setting their 2017 rates. These early reports rely on the information insurance companies report to CMS, and so they are only available in markets where sufficient issuers had submitted their data, and they are only as accurate as the data provided. This is why it is important that the companies focus on data management to fully and accurately report their experience and try to do so as early in the year as feasible.

We have also made some other adjustments to the methodology for the 2017 plan year including using more recent data, updating medical and drug trends, and incorporating preventive services into companies’ risk adjustment calculations.

As we contemplate making additional changes, we want to get more input from the public. And that’s the purpose of the public meeting on risk adjustment. As outlined in more detail in the white paper, some of the ideas we want to discuss include: whether and how to account for partial year enrollment in the model; whether and how to develop a prescription drug model, accounting for newer high-cost medications; whether and how to pool high risk enrollees; and whether and how to recalibrate the model based on data for the individual and small group populations, instead of a commercial dataset drawn from the employer market.

We look forwarding to hearing feedback from the public about these and other possible changes to the risk adjustment program.

We will continue to listen and learn to make sure we operate this vital program to maximum effect. We will take feedback and suggestions through April 22, 2016, and will keep the public informed as we consider proposals to change and improve the risk adjustment program in 2018 to serve the goals of providing affordable coverage and better care for millions of Americans.

CMS Invites Quality Innovation Network-Quality Improvement Organizations to Submit Special Innovation Projects to Expand Their Reach in Improving Care Delivery

By: Patrick Conway, MD, MSc
Acting Principal Deputy Administrator
Deputy Administrator for Innovation and Quality
CMS Chief Medical Officer

Kate Goodrich, MD MHS
Center for Clinical Standards and Quality

Jean Moody-Williams, RN, MPP
Deputy Director
Center for Clinical Standards and Quality

Dennis Wagner, MPA
Director, Quality Improvement and Innovation Group
Center for Clinical Standards and Quality

The Centers for Medicare & Medicaid Services’ (CMS) Quality Improvement Organization (QIO) Program is constantly evolving to help ensure that Medicare beneficiaries receive better care, better health, and greater value. Today, CMS is announcing the program’s next evolution: two projects focused on supporting and scaling quality improvement innovations.

With this announcement, Quality Innovation Network-Quality Improvement Organizations (QIN-QIOs) can collaborate with health care providers and/or partners to compete for 28 Special Innovation Project (SIP) awards that fall within two topic categories totaling $8 million.

SIPs are two-year quality improvement projects that align with the goals of the CMS Quality Strategy ( and emphasize the power of partnerships. There are two categories of SIPs for QIN-QIOs to consider:

  1. “Innovations that Advance Local Efforts for Better Care and Smarter Spending,” which will address healthcare quality issues that occur within specific QIN-QIO regions.
  1. “Interventions that are Ripe for Spread and Scalability,” which will focus on expanding the scope and national impact of a quality improvement project that has experienced proven but limited success. The expectation is that similar benefits would be experienced on a large scale if spread throughout the greater health care community.

The scalability category aligns with the CMS Strategic Innovation Engine (SIE) (, a new endeavor launched in August of 2015. The SIE is working to rapidly move innovative, evidence-based quality practices from research to implementation through the QIO Program. In consultation with the SIE Executive Leadership Council, CMS is seeking projects that:

  • Streamline patient flow in various health care settings, including hospital units, outpatient clinics, primary care offices, ambulatory surgical centers, and cancer centers resulting in efficiencies, improved satisfaction, decreased mortality, better care, healthier people, and smarter spending.
  • Work with health plans and/or care coordination providers to deploy an integrated approach to post-acute care that results in enhanced care management, safe transitions from one care setting to another, improved health outcomes, and reductions in harms.
  • Increase value, patient affordability, and appropriate use of specialty drugs by applying evidenced based criteria to prescribing practices and by monitoring effectiveness when providers have a choice(s) among equally effective drugs with differing costs.
  • Address acute pain management. For example, more is needed to assist sickle cell patients: from accurate identification of their illness to education of emergency department staff on sickle cell disease while addressing the cultural stigmas often associated with the disease.
  • Utilize big data analytics to reduce preventable harm in healthcare.

We encourage those in the larger healthcare community who are leading quality work in these areas, with interventions and proven results, to reach out and explore potential partnerships with QIN-QIOs. Through collaboration with healthcare providers, patients, families, and other key stakeholders, QIN-QIOs have tremendous potential to take those interventions to the national level and improve the health care delivery system by tapping into new settings of care and building upon the knowledge gained by people working on the front line of providing quality health care.

The QIN-QIOs selected to carry out these SIPs will leverage their data-driven approach, extensive partnerships, and the voices of patients and families to positively impact Medicare beneficiaries in their communities and nationwide.

The QIO Program’s 14 QIN-QIOs work with providers, community partners and beneficiaries on multiple data-driven quality improvement initiatives to improve patient safety, reduce harm, engage patients and families, improve clinical care and reduce healthcare disparities. For more information about the CMS QIO Program and for a complete list of QIN-QIOs, please visit the QIO Program website (

Taxes and Health Care Coverage: Five Tips for Tax Filers

By: Kevin Counihan, CEO of the Health Insurance Marketplaces, Centers for Medicare and Medicaid Services

Last year, millions of people purchased quality, affordable coverage through the Health Insurance Marketplace, and most benefitted from advance payments of the premium tax credit that lowered their monthly premiums. With the tax filing deadline a few weeks away, it’s a good time to remind everyone – both new and renewing consumers – about what they need to know when they file their taxes.

For those who returned to the Marketplace in 2015 to renew coverage or pick a different plan, the tax filing process is generally the same as last year. But, for the millions who signed up for Marketplace coverage in 2015 for the first time, the process may be a new one. By now, all Marketplace consumers should have received a statement in the mail from the Marketplace called a Form 1095-A. These statements include important information needed to complete and file a tax return.

Marketplace consumers who received advance payments of the premium tax credit are required to file a tax return to reconcile that financial assistance. This is similar to the reconciliation process for taxes withheld from wages during the year – consumers receive a larger or smaller refund depending on whether the appropriate taxes were withheld based on the tax filer’s actual income and other factors.

It’s extremely important that those who received advance payments of the premium tax credit reconcile these payments when they file their tax return. Individuals who do not do so will generally see their refunds delayed, and are not eligible to receive advance payments of the premium tax credit in future years.

Individuals with Marketplace or other types of health coverage may also have received additional forms called a Form 1095-B or 1095-C from their employer, insurance company, or the government program that provides their coverage, like Medicare or Medicaid. Taxpayers don’t need to attach this information to their return or wait to receive the form before filling their federal taxes, but should keep it in a safe place with other tax records.

An important reminder: Since most tax filers use a tax preparer or tax preparation software, most filers just need to answer questions when prompted.

We are here to help. Marketplace consumers having questions should contact the Marketplace Call Center (1-800-318-2596).  Additional resources and information for is also available at or

Here’s summary of five helpful tips for both Marketplace consumers and other tax filers when it comes to filing taxes this year:

Five Tips for Tax Filers

  1. Most people just need to check a box: The vast majority of tax filers have qualifying coverage (including employer coverage, Medicare, Medicaid, or other coverage) and will just need to check a box when they file their taxes to indicate that that everyone in their household had coverage for 2015. This year, many consumers will receive a new form called a Form 1095-B or a Form 1095-C in the mail from their employer, insurance company, or the government program that provides their coverage, like Medicare or Medicaid. Taxpayers don’t need to attach this information to their return or wait to receive the form before filling their taxes, but should keep it in a safe place with other tax records. For more information on all these forms, visit the IRS website at:
  1. Marketplace consumers must file a tax return to reconcile any advance payment of the premium tax credit they received in order to maintain eligibility for future help: By now, all Marketplace consumers should have received a statement in the mail from the Marketplace called a Form 1095-A. These statements include important information needed to complete and file a tax return. It’s extremely important that those who received advance payments of the premium tax credit reconcile these payments when they file their tax return. Individuals who do not do so will generally see their refunds delayed, and are not eligible for advance payment of premium tax credits in future years.
  1. The fee for not having coverage is increasing. For those who could afford health insurance and chose not to get coverage, the fee for not having minimum essential coverage in 2015 has increased to 2 percent of household income or $325 per person. The fee is pro-rated based on how many months a person is uninsured. The fee goes up again for 2016. If someone doesn’t have coverage or an exemption in the 2016 calendar year, but could afford coverage, the fee increases to $695 per person or 2.5% of income, whichever is higher.
  1. Some people who didn’t have health coverage in 2015 will qualify for an exemption: While those who can afford health coverage but chose not to enroll generally have to pay a fee, some people who couldn’t afford coverage or met other conditions can receive an exemption. You can find out more information online from the Marketplace or IRS at or
  1. Help is available. If people have questions about Marketplace tax forms, qualifying for exemptions, or the fee, they should contact the Marketplace Call Center. The call center is open all day, every day at 1-800-318-2596. Additional resources and information for is also available at or



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