CMS Provides Additional Resources to Improve Care and Prepare for the Quality Payment Program for Clinicians

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

Last year, an overwhelmingly bipartisan Congressional majority – with the support of the medical community and stakeholders – passed the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA. The law ended more than a decade of last-minute fixes and 17 potential payment “cliffs” for thousands of Medicare fee-for-service clinicians, while moving away from paying for each service a physician provides towards a system that rewards physicians for coordinating their patient’s care and improving the quality of care delivered.

Over the past year, we have worked in the same spirit as the law’s model of partnership and progress as we implement policies to improve the health and well-being of Americans. Today, the Centers for Medicare & Medicaid Services (CMS) announces up to $10 million over the next three years to fund the second round of the Support and Alignment Networks under the Transforming Clinical Practice Initiative (TCPI).

TCPI currently consists of 39 national and regional health care networks and supporting organizations – Practice Transformation Networks and Support and Alignment Networks – that provide assistance to thousands of clinicians in all 50 states to improve care coordination and quality and to better understand their patients’ needs. These networks are a key support for clinicians preparing for the payment changes under MACRA by helping clinicians transform the way they deliver care and participate in Alternative Payment Models (APMs), a key part of the proposed Quality Payment Program.

Eligible Medicare clinicians in the proposed Quality Payment Program who sufficiently participate in Advanced APMs could receive a 5 percent bonus Medicare payment beginning in 2019 for their participation in the 2017 performance period. Eligible clinicians who participate in the proposed Quality Payment Program through the Merit-based Incentive Payment System (MIPS) could also benefit from participating in APMs. By participating in these models, the eligible clinicians could receive a favorable scoring standard under MIPS, as well as extra credit in the Clinical Practice Improvement Activities performance category. Clinicians who perform well under MIPS in the 2017 performance period may qualify for up to a 4 percent Medicare payment adjustment in 2019, with additional bonuses for the highest performers.

TCPI helps more clinicians to improve quality, coordinate care, and spend dollars more wisely by providing peer-to-peer support to primary and specialty physicians, nurse practitioners, physician assistants, clinical pharmacists, and their practices. For clinicians that elect to participate in MIPS, this support will help them be successful. Participating networks also disseminate best practices and provide technical assistance and coaching to practices that are moving towards participation in APMs.

Today’s announcement continues to support clinicians across the country in transforming their practices by requiring competitive applications to have signed commitments to enroll a minimum 5,000 or more eligible clinicians and their practices in their network. These clinician practices must be advanced in delivering high-quality and efficient care, so that they can quickly learn from the initiative, support improvement at scale, and join APMs.

As a practicing physician, I know the importance of quality improvement support and sharing of best practices to help clinicians transform their practice and deliver outstanding care to every patient.

CMS encourages all qualified entities to apply for the Support and Alignment Network 2.0 funding opportunity so that we can continue to build on the successes we have made so far.

If you are a clinician who is interested in finding a Support and Alignment Network or Practice Transformation Network near your practice, please visit:

For more information on the Transforming Clinical Practice Initiative, please visit:

For a fact sheet on the Support and Alignment Network 2.0 Funding Opportunity Announcement, please visit:

Remarks of CMS Acting Administrator Andy Slavitt at the Marketplace Innovation Conference

Welcome. And thank you for coming to a session that allows us to look at a deeper level at what is happening inside the Health Insurance Marketplace. And I’m not talking about what’s in the headlines, but below the surface– what’s happening with millions of Americans as they get coverage– many for the first time– and also how the system is adapting. At the same time, the consumer is beginning through the Marketplace to shape many of the changes in health care as they make decisions about the coverage and care they want. My focus today isn’t really just on the success stories, of which I see many, but on the lessons we have learned and are still learning from what’s going on inside and across the Marketplace.

I stood up here a year ago and reflected on another program which served millions of people as it reached not its third year of operation, but its 50th– the Medicare program.

Before it became the beloved program that millions of Americans rely on for their health and financial security, Medicare had, for those of you that know the history, fairly controversial beginnings and has gone through a number of evolutions. In large part, Medicare has been successful because it has adapted to the progress of medicine and the needs of the consumer, moving from a medical benefit to prevention to the pharmacy and now to coordinated care models. Medicare today is not only a leading force in value-based care, but it also offers widely popular consumer choice and competition for services and benefits from private plans across Medicare Advantage. The Health Insurance Marketplace, in many ways, picks up right there, bringing private sector competition and services to make health care available in an even more open market fashion– and creating greater opportunities for us to learn to serve consumers successfully.

As I reflect on the progress of the Marketplace, I will cover three important topics:

-First, that the Marketplace is succeeding by almost any benchmark, but it is still in its early trial and error stage. Progress won’t be even and for the first five years, we will continue to be in a learning and experimentation period– where a lot will be tested before best practices are more widely developed.

-Second, that the Marketplace, stepping back from the daily headlines, is a highly strategic opportunity for those who see health care evolving into a more B2C market to create new competitive advantages.

-And, third, is that even though we are in the learning and experimentation stage, we are confident we have the tools to make sure the market is stable and succeeds for the long term


Success but Early

Secretary Burwell talked this morning about how far we’ve come thanks to the ACA and thanks to so many communities across the country– the many physicians and clinicians, consumer advocates, assisters, health plans and hospitals who have worked together to have a remarkable impact. We’ve brought the uninsured rate to a record low and for the first time, our country is providing access to care for people regardless of their medical condition or how much money they make. Competition has worked to create more affordable choices. Last year, as 4 million new consumers signed up for coverage, over 90 percent of them had an average of 3 insurance companies to choose from, translating into 50 plan options. Two-thirds of customers had the option of selecting a plan with a monthly premium of $75 or less after tax credits. And thanks to tax credits, consumer’s rate increases averaged only 4 percent.

But more important is what consumers are getting for their money. Commonwealth reports that consumers say they can afford primary care and prescription drugs they just couldn’t afford before. And a good-sized majority are satisfied with their coverage. So we are beginning the process, in community after community across America, of re-connecting consumers to the health care system. Employer-sponsored coverage has not been disrupted and yet employees now have options to move jobs without fear of their families being unable to afford and obtain coverage. And contrary to what some headlines may suggest, the Marketplace has launched at and maintained costs well below CBO estimates. This is true for both consumers and the government– even as we provide care more comprehensively and to many who had conditions that had gone untreated.

While this represents a good start, we are in the very early stages– particularly, in the context of how programs like Medicare developed. And the Marketplace is right in the middle of what i will call a 5 year “learning and experimentation stage.” During these early years, consumers are getting educated about their options, while market participants– payers and care providers– learn their needs and experiment with the best ways to meet those needs. We are hearing promising approaches every day. But it’s not every day, or even every decade, that a new market totaling in the $10s of billions of dollars is created and launched across the country– and in places as diverse as rural North Dakota and Center City Philadelphia– where consumers have a diverse set of health needs, languages, cultures and incomes. So today, I hope we recognize that while we have learned many things, we are still only in this first stage of learning how best to bring affordable high quality care and service to this new market.
Strategic opportunity with consumerism

A fair question is why is it worth investing in all of this learning in all of this experimentation to serve the individual consumer market.

What makes the Marketplace an important strategic opportunity is very simply how squarely it puts power into the hands of the consumer. I mentioned this when I talked about the development of Medicare into Medicare Advantage and Medicare Part D, but the Marketplace is consumerism in the purest form. Over the years, the consumer has been much talked about but had very little power to shape what they wanted and paid for. There have been a lot of forces over the years that have shaped health care. Until now, everyone but the consumer has had a say in it.

The Marketplace gives the consumer a voice they have never had before. And every day, the Exchange gives us unprecedented insight into how consumers behave and what they want from the health care system. There’s a short list of learnings and a far longer list of things to be learned.

Let me start with some of things that we have learned.

First, Marketplace consumers are much more engaged and increasingly educated about what they purchase particularly compared to other health care consumers. 70percent of renewing consumers on the Federal exchange– seven-zero— came back to the exchange to proactively choose a plan instead of opting automatic enrollment. That creates millions of opportunities for consumers to find the right offering at every open enrollment. As they say in my home state of Minnesota, the hockey capital of Minnesota, many more shots on goal means more opportunities to score– useful as plans experiment with different offerings.

-The second learning is that many consumers actually want to shop for their health care, in addition to their health coverage. Last year, the Marketplace began to offer consumers the option of selecting plans not by looking at the plan first– but by first finding a hospital or physician or prescription . . . then looking at which health plan offers them. Even in a pilot year, consumers chose this path 3.6 million times in just the 38 Federal marketplace states.

Third, consumers want access to routine services without a deductible, with 8 in 10 consumers selecting plans which provide direct services outside of their deductibles like primary care and generic drugs. Health plans are responding in what I think is a promising early example of the consumer shaping a need and the market fulfilling it.

-Finally, consumers are saying loudly and most clearly that affordability matters more to them than it does when they select a plan through an employer– and is the most important concern. 90 percent of people have selected bronze or silver plans. And those large number of consumers who came back to shop? Those who switched plans saved over $500. So if consumers want savings, what are they willing to compromise on? According to a recent Kaiser Family Foundation report, consumers would much prefer a narrower network to a higher deductible or higher premium. This needs to be explored more as it opens the door, not just to narrow networks, but to innovative contracting and network strategies. While we have long wrestled with affordability as a country, the Marketplace allows us to see it in a new way– through the eyes of a consumer as they seek out high-quality care they can afford. And that reminds us– the millions of us who work in health care– that affordability and affordable care must be a part of everyone’s job.

So, while we’ve learned a lot about consumer preferences, there is still a longer set of questions that can be explored and experimented with over the next two years. And here are seven of mine but I know there are many others.

-How do we reach out to and connect with communities that are still left behind?

-What role will quality ratings and consumer reviews play in shaping the market and in improving quality as they are piloted and promoted?

-What role will exposing the actual cost of services play in consumer decision making and in increasing affordability?

-Will consumers choose the ease of a more standard set of “simple choice” benefits or will they opt for more customization?

-What about consumer loyalty? Working on health means building relationships with consumers and I expect this to be a big area of learning. There are examples of highly active markets where people can switch frequently, like cell phone service, music subscriptions or auto insurance. Competitors in those areas have found innovative ways to build long-term loyalty. Several companies are aggressively experimenting on the Marketplace. One, Centene, with its Ambetters product, offers a loyalty account to consumers and deposits money for consumers to use towards deductibles, coinsurance, and other health care spending.

-Next, what are innovative and consumer friendly ways to help consumers manage the costs of care — particularly in rural or other under-served locations? Companies are experimenting with enhanced primary care access, telemedicine, personalized health interventions, and other approaches you’ve heard today. These innovations will be ripe for scaling well beyond the Marketplace.

-Finally, what Marketplace specific contracting approaches will create aligned incentives and reduce the underlying unit costs that are a significant part of a consumer’s premium? Health plans must be successful in partnering with hospitals– who have seen a significant benefit from the ACA in reduced bad debt and increased patient flow– to lower the cost of care for consumers.

The point is that consumerism brings a trial and error phase with new approaches to everything from network strategy, to care management models, to new product approaches, benefit designs and new customer retention. Many of the companies in this room and a number of others have found success and have passed that on to consumers in the form of lower and more predictable costs and innovative services. Others haven’t yet but are beginning to follow best practices or look for other competitive advantages. And some will end up as more pure B2B companies. In the age of Uber and the consumerization sweeping our economy, we need to allow everyone the opportunity to innovate in this space. Outside of health care, the B2C economy has upended businesses like stock trading, travel and even data storage that once had only a limited consumer presence but now give consumers the ability to do for themselves on their mobile phones what they couldn’t before.

For a number of health plan CEOs that I talk to, their view of the Marketplace represents the opportunity to accelerate their organizations into this B2C world and get in synch with consumer demands as many of them see health care continuing to shift across all areas from B2B to B2C. In our notice of rulemaking last year, we asked explicitly for ways we could make innovation and testing of new ideas and approaches easier and must look for more opportunities and flexibilities ahead.

Market Stability

Finally, as in all markets, strategies won’t succeed the first time, every time. Over the course of these five years, we need to allow for continued experimentation. But problems that have plagued certain health care markets for years, lack of access, higher prices, poor social determinants of health also won’t get solved overnight. Unlike the Medicare program, the Marketplace is a complete private-sector solution to covering the uninsured and competition and innovation take some time to work. Gaps, like low competition or higher costs in some rural communities that have existed for years, will remain and be even more visible while we all work on solutions to address them.

Part of our job in the Administration and overseeing the marketplace development is to create a predictable and level playing field for consumers, health plans and care providers and to create stability in these early years, even through these natural bumps and to allow for this experimentation.

Even as the market signs up millions of new consumers in record numbers, we are paying rigorous attention to adjustments that are needed as the Marketplace matures. We have an experienced team of career operators and actuaries, who have come from both the private sector and directly from our Medicare Advantage and Part D operations where we know how to set up and operate large successful marketplaces with a variety of risk structures. This team studies the data and meets regularly with all market participants and takes a strategic view to determine what adjustments are warranted.

This past January, I committed to complete a thorough review and making of adjustments on what we have learned to date. And over the past several months, we have taken a set of actions which strengthen the risk pool, limit upward pressure on rates, and provide a strong foundation for the Marketplace for the long term. This process is a continual ongoing commitment but we have made meaningful progress so far.

First, we systematically review our policies towards Special Enrollment Period (SEP) sign ups. We eliminated many SEPs that were unnecessary or subject to abuse, clarified the process and added validation requirements and enforcement for those who have a need to enroll during a SEP.

Second, we have proposed steps to align risk adjustment to account specifically for consumers who may need Marketplace coverage for only a partial year, reducing the unintended consequences. One of the aims of the Marketplace is to be there for people when people need the coverage and when people find work, insurance companies shouldn’t be penalized.

-Third, we have proposed further enhancements to risk adjustment so health plans can invest in serving sicker, hard to treat populations. This begins with incenting everyone to invest in the data and analytics to understand their members better.

Fourth, we are providing health plans with earlier and better information for rate filings to reduce surprises and help them better predict the cost of medical care for enrollees and price their policies appropriately.

Fifth, we have announced several actions that both help consumers get or keep the right coverage and improve the risk pool: by closing short term coverage loopholes; by significantly improving our Data Matching process to prevent consumers from unnecessarily losing coverage; and, by improving the transition for Medicare eligible consumers out of the exchange and on to Medicare.

-And, of course, in recognition of the still early stage we’re at with the end of the 3-year reinsurance program, the one-year tax holiday of $13.9 billion will also help stabilize premiums next year.

And later this year, we will talk about our innovative effort to focus on reaching young people in the fourth Open Enrollment period.

These changes will give health insurers, supported by state departments of insurance, the ability to become more confident in putting together affordable offerings for consumers as they finalize rates over the summer and fall. And more broadly, as new areas emerge, I am highly confident in the focus and expertise of the career staff at CMS, and at the tools at their disposal, to continue to make the Marketplace attractive, stable and successful.


In closing I would just like to emphasize a few points. I originally came to CMS to help lead the turnaround of and participate in the implementation of the Affordable Care Act. Thanks to the passage of the ACA, we have finally moved past the place where many of us have spent our careers– in debates about how we might address the uninsured or improve care, to a time when can now get busy actually covering people. It has been and is uniquely rewarding to be a part of. But health care didn’t automatically become affordable and accessible the day the law passed. It has taken incredible effort to see a system that hasn’t changed in a long long time begin to build this new market, but much more will be learned before best practices are more harmonized.

For all our success to date, new coverage must only be the start of things. We have the opportunity to change health care in America like we did 50 years ago at the dawn of Medicare and Medicaid, back when 1/3 of seniors lived in poverty to a time, now, when less than 10 percent of seniors live in poverty. And if we learn and experiment in these early years, we are just getting started. And part of the next leg of the development is not just how people’s lives change in profound ways, but how the consumer can force changes on the health system that wouldn’t happen– or happen as quickly– otherwise. Progress won’t be a straight line, but we are committed to working side by side with all of you in what will have far reaching impact to improving health care across this country. Thank you for all of the incredible hard work and innovation.

Marketplace Success Stories

By Kevin Counihan, Health Insurance Marketplace CEO 

Three years in, the Health Insurance Marketplace is a competitive, growing and dynamic platform – a transparent market where issuers compete on price and quality, and people across the country are finding health plans that meet their needs, and their budgets.

Increasingly, the Marketplace is also serving as a laboratory for innovations and strategies that are helping us build a better health care system. Before the Affordable Care Act, individual market insurers competed in large part by finding and only covering the healthiest, cheapest consumers. Today, everyone can buy coverage, regardless of health status, and issuer competition centers on quality and cost-effectiveness. As a result, issuers in states across the country are finding innovative ways new ways to provide quality, cost-effective health care.

This week, as we’ve previewed, we’re inviting issuers to HHS to share their stories and their strategies for success on the Marketplace. We’re calling this conference “Marketplace Year 3: Issuer Insights & Innovation.”

The presenters at the forum include issuers from all regions of the country and range from major commercial insurers to Blues plans to integrated health systems to regional carriers to new plans to longstanding Medicaid plans. They’ll describe innovations around paying for high-quality care, working with doctors and clinicians to encourage coordinated care, and using data analytics to find patients, engage them in improving their health, and provide the services that meet their needs.

Here are some examples.

Value-Based Payment Design

Aetna set a goal to have 75 percent of its spending go through value-based contracts by 2020. Already today, they have more than 800 value-based contracts in 36 states like Texas, California, Virginia, Ohio, and many more. Under their national value-based care network, providers are transforming their practices and improving the patients’ experience. For example, they are identifying at-risk patients earlier, engaging patients in care decisions, coordinating care more effectively, and providing new hospital case managers to explain discharge instructions and new medications to patients. Not only are the value-based contracts improving quality, they’re paying off in reduced costs. Aetna is seeing medical costs come in 8 percent below what would otherwise be expected in areas with these contracts.

Blue Cross Blue Shield of Massachusetts has a payment model called an Alternative Quality Contract. It pays doctors and clinicians based on the quality, efficiency and effectiveness of their care. And it works. A study from the New England Journal of Medicine found that this program saved money; at the same time, it gave patients better care than similar patients in other states.

Coordinated Care

University of Pittsburgh Medical Center (UPMC) Health Plan in Pennsylvania realized that early collaboration between providers and care coordination teams leads to measurable success. These coordination teams are made up of nurses, social workers and community health workers who can visit while the patient is in the hospital, coordinate their care as they leave the hospital, and depending on the individual’s needs, check up on them at home. They’re trusted connections between patients and providers.

Intermountain Healthcare in Utah has placed behavioral health specialists within primary care offices. While it costs more up front, they’re finding that it reduces inpatient behavioral health admissions enough to lower overall costs in the long run while improving patients’ lives. They’re calling this effort a “Total Accountable Care Organization”, or TACO. It’s a health care system that cares for the physical health and behavioral health of its members, while tailoring its long-term supports and social service offerings for people with significant health needs.

Using Data Analytics to Improve Patient Care

Blue Cross Blue Shield in Florida closely analyzed its prospective Marketplace customers. From its analysis, they learned that their new market wouldn’t look the same as their pre-ACA individual market, and that there would be more variety in health issues across communities. Based on their research, they created plans for the different needs of unique communities. They used “place of delivery” care models to bring together nurses, analysts, pharmacists, social workers, and other experts into inter-disciplinary teams that focused on improving care for high-risk populations in particular communities.

Horizon Blue Cross Blue Shield in New Jersey used its consumer analytics to identify the uninsured markets in their area, and launch a targeted marketing strategy to reach those uninsured residents. With ad placements outdoors, on public transit, and through social media, as well as mail, digital and email outreach, it reached communities that other insurers hadn’t. For example, it saw opportunity in the large number of Latino residents who were uninsured. With a Spanish language marketing campaign, it helped grow its Latino membership from 8,000 to 30,000 members. And it stepped up its efforts to retain those new consumers.


These are just a few of the new ideas and innovative strategies that are being used – they’re what makes me so confident in the future of the Marketplace. And as this market continues to grow and mature, we’ll see even more stories of success as issuers in every state find new ways to provide reliable, quality, person-centered coverage for Americans and their families for years and decades to come.

The Proof is in the Numbers: DMEPOS and Health Outcomes Data

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

When the Medicare program implements changes to how it pays for medical care or equipment, CMS monitors to make sure that any adjustments meet our goals of preserving access to care and facilitating better health outcomes for Medicare beneficiaries.

CMS has implemented changes to how Medicare pays for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) over the last few years. Following numerous studies from the HHS Office of Inspector General and the Government Accountability Office showing the DMEPOS payments to be excessive, Congress passed legislation requiring competitive bidding for DMEPOS. Since 2011, CMS has implemented those changes to ensure that people with Medicare get the equipment they need while reducing costs for beneficiaries and taxpayers.

Round 1 Rebid of the DMEPOS competitive bidding program has saved more than $580 million in nine markets between January 1, 2011 and December 31, 2013. And Round 2 and the national mail order programs have saved approximately $3.6 billion between July 1, 2013 and June 30, 2015.

Earlier in 2016, in compliance with statute, we phased in the adjusted DMEPOS fee schedule rates using competitive bidding information across the country in the non-competitive bidding areas. This has been a gradual implementation, with a blend of 50 percent of the unadjusted payment rates and 50 percent of the adjusted payment rates beginning on January 1, 2016. We use a real-time monitoring system to ensure beneficiaries are receiving the equipment they need. This system has been in place since the beginning of the program and tracks access to items and services and a number of clinical outcome measures such as mortality, hospitalizations, and emergency room visits.

On May 17, 2016, we posted monitoring data that shows our efforts have saved the Medicare program money while continuing to ensure access to equipment for all who need it in the non-competitive bidding areas. Specifically that data showed that suppliers in non-competitive bidding areas have continued to accept the new, adjusted DMEPOS payments.

At the time that we posted the data on acceptance of the new, adjusted rates, we indicated that we would soon be furnishing monitoring data on health outcomes for beneficiaries in non-competitive bidding areas.  The health outcomes monitoring data are now available at

We have been monitoring health outcomes data closely and have not detected any changes in the number of deaths, hospital and nursing home admission rates, monthly hospital and nursing home days, physician visit rates, and emergency room visits in 2016 (after the new, adjusted DMEPOS payment rates were in place) compared to 2015 (before the new, adjusted DMEPOS payment rates) in the non-competitive bidding areas. For example: In 2015, between seven and nine percent of beneficiaries using oxygen equipment in non-contiguous areas such as Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands made emergency room visits for various reasons, which may or may not have been attributed to the oxygen equipment items and services they received.  For the first four months of 2016, this rate of emergency room visits for users of oxygen equipment in these areas has not changed.  This result indicates that the change in payment for oxygen and oxygen equipment did not result in an increase in emergency room visits, as no increase in visits has been observed.  This is true for all beneficiaries in these areas, including those who have been diagnosed with a condition that might indicate the need for oxygen and oxygen equipment.

In addition to continued high acceptance of the new, adjusted DMEPOS payment rates from providers and suppliers and steady health outcomes across all non-competitive bidding areas, the amount of these supplies and services furnished in non-competitive bidding areas has remained steady as well. This means that providers and suppliers are both accepting the new, adjusted payment rates and are still providing the same volume of these suppliers to beneficiaries.  Additionally, calls received by 1-800-Medicare staff related to access to DMEPOS items and services declined in the first quarter of 2016 compared to the number of calls received in the first quarter of 2015.

Based on these monitoring efforts, we continue to believe that the partially adjusted fees implemented in January 2016 have had no negative impact on beneficiary access to quality items and services. We will continue to monitor all data very closely leading up to and following implementation of the phase-in of the fully adjusted DMEPOS fee schedule adjustments on July 1, 2016.

Medicare’s “Big Data” Tools Fight & Prevent Fraud to Yield Over $1.5 Billion in Savings

By Dr. Shantanu Agrawal, Raymond Wedgeworth and Kelly D. Bowman

BLOG UPDATED: July 11, 2016

4th Year Fraud Prevention System Data can be found here:

A version of this commentary was published in May 24 editions of Modern Healthcare. New anecdotal content has been added. Please see the following link to view the original content

Over the past five years, the CMS has successfully implemented a Fraud Prevention System using “big data” and predictive analytics approaches to fight fraud, waste and abuse in the Medicare fee-for-service program. Taking “big data” mainstream has given the CMS the ability to better connect with public and private predictive analytics experts and data scientists, as well as collaborate more closely with law enforcement. The Fraud Prevention System’s “big data” effort has had a profound impact on fraudulent providers and illegitimate payments by allowing us to quickly identify issues and take action. For example, the FPS identified a home health agency in Florida that billed for services that were never rendered. Due to the FPS, CMS placed the home health agency on prepayment review and payment suspension, referred the agency to law enforcement, and ultimately revoked the agency’s Medicare enrollment. In Texas, FPS identified an ambulance company submitting claims for non-covered services and services that were not rendered. Medicare revoked the ambulance company’s enrollment. Likewise, FPS identified that an Arizona, medical clinic had questionable billing practices, such as billing excessive units of services per beneficiary per visit. Upon review of medical records, it was discovered that physicians had been delivering repeated and unnecessary neuropathy treatments to beneficiaries. The medical clinic was revoked in 2015 from Medicare enrollment.

Through cases like these, the CMS is seeing impressive results nationwide. This predictive analytics technology contributed to more than $1 billion in savings in 2014 and 2015. The Fraud Prevention System, or FPS, is innovative in that we have moved beyond the reactive “pay and chase” approach toward a more effective, proactive strategy that aims to prevent these illegitimate payments in the first place. Since its June 2011 inception, the FPS has identified significant savings by running sophisticated analytics on 4.5 million Medicare claims on a daily basis, prior to payment. Year after year, the FPS has continued to improve its ability to identify or prevent fraud. Since the beginning of the program, over $1.5 billion in inappropriate payments has been identified by the system through new leads or contributions to existing investigations. Also, in 2015, the CMS marked its first-ever national return-on-investment of $11.60 for every dollar the federal government spends on this program integrity system. As we moved toward preventing inappropriate payments, we also successfully developed ways to measure costs avoided due to removing certain providers from the Medicare program and tracking return on investment. These methodologies to calculate cost avoidance have achieved certification by HHS’ Office of Inspector General, the first such certification in the history of federal healthcare programs. The CMS is now working to develop next-generation predictive analytics with a new system design that even further improves the usability and efficiency of the FPS. Using it and other advanced tools, we are committed to addressing fraud, waste and abuse in the Medicare program to better protect beneficiaries and taxpayers.

Big Data Tools Infographic 5.27.16

Pitching Medicaid IT in Silicon Valley

By Andy Slavitt, CMS Acting Administrator @aslavitt 

Earlier this year, I announced a new effort to connect new, innovative companies and their investors to the state Medicaid program IT space. Since this announcement, I have been encouraged by the initial interest from companies that may not have otherwise ever thought about participating in this important health insurance program that covers more than 72 million Americans.  

That’s why I’m in Silicon Valley today to participate in a forum on bringing technological advances to Medicaid. The forum is convening states, innovative tech companies, and federal Medicaid officials on how to collaborate to improve the delivery of Medicaid health coverage in states.  

These meetings will help in getting two very different cultures – state government and tech companies – speaking the same language and exploring opportunities to work together to continue to improve care delivery within Medicaid.  

While there are 56 different state, district, and territorial Medicaid programs, there is a lot of commonality in their IT needs. There is always new IT procurement and opportunities for new, innovative vendors in this space. This industry is primed for a new era — Software as a Service software– that has real time capabilities and requirements and Federal sponsorship for a 90 percent match on qualifying IT investments. 

Investment gravitates to needs and problems it can solve. There is no greater opportunity than bringing technical know-how, innovation and creativity to improve the health of Americans with health, social and economic challenges.  

CMS is fully committed financially and operationally to partner with states and the private sector to improve state programs. The federal government alone invests more than $5 billion per year in Medicaid IT and matches up to 90 percent on new projects. Still, there may be some apprehension by IT companies – large or small, new or established – to engage in bidding for state government contracts.  

But, we’re working to tear down these barriers and taking it past the opportunity to make a new market.  

We’ve already created a one-stop-shop for the tech community to connect with states looking for innovative solutions. On this site, vendors can easily find links to states’ Medicaid procurement websites and to any open state Medicaid IT Requests for Proposals. 

We are also doing more to bring these two groups together. CMS is developing a “playbook” to help companies translate states’ requests for proposals into work they believe can move the needle. We are also inviting vendors to seek pre-certification from CMS for their Medicaid IT solutions and put their names and products on a “Pre-Certified Medicaid Modules” list on our website.  

Finally, to help be a bridge between states and the tech sector, we are actively recruiting a full time entrepreneur-in-residence fully committed to the Medicaid space.  

It is an exciting time to be in the Medicaid space. With Medicaid expansion, Medicaid has become America’s health plan. Medicaid has always served some of our most vulnerable citizens: the elderly, disabled, low-income, pregnant women, and children. New policies strengthen consumer access and driving improved quality and additional care options for people at home and in their communities. Stronger approaches to IT underpin these promising new directions.

This work has the potential to leave a legacy in the lives it touches for many years to come. Engaging the tech community and federal and state policy makers in this substantial modernization effort is just the beginning. 

CMS Continues Progress toward a Safer Health Care System through Integrated Efforts to Improve Patient Safety and Reduce Hospital Readmissions

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

We know that it is possible to improve national patient safety performance resulting in millions of people avoiding infections and adverse health events. A report released by the Agency for Healthcare Research and Quality back in December showed an unprecedented 39 percent reduction in preventable patient harm in U.S. hospitals compared to the 2010 baseline. This has resulted in 2.1 million fewer patients harmed, 87,000 lives saved, and nearly $20 billion in cost-savings from 2010 to 2014. The nation has also made substantial progress in reducing 30-day hospital readmissions.

I have been working in the field of quality improvement for 20 years, and I have never before seen results such as these. This work, though, is far from done, and it is imperative that we sustain and strengthen efforts to address patient safety problems, such as central line infections and hospital readmissions. Today, we at CMS are excited to continue progress toward a safer health care system by releasing a Request for Proposal (RFP) for Hospital Improvement and Innovation Networks (HIINs).

The HIINs, which will be part of the Quality Improvement Organization (QIO) initiative, will continue the good work started by the Hospital Engagement Networks (HENs) under the Partnership for Patients initiative. These organizations will tap into the deep experience, capabilities and impact of QIOs, hospital associations, hospital systems, and national hospital affinity organizations with extensive experience in hospital quality improvement. The HIINs will engage and support the nation’s hospitals, patients, and their caregivers in work to implement and spread well-tested, evidence-based best practices.

QIOs that have developed strong relationship with HENs under the Partnership for Patients initiative have decades of experience with quality improvement and are currently supporting more than 250 communities nationally in work to improve care transitions and reduce adverse drug events across a wide variety of health care and community-based organizations.  HENs involved in supporting the Partnership for Patients initiative have established relationships and trusted partnerships with over 3,700 acute care hospitals. These efforts involve approximately 80 percent of all people discharged from hospitals across the nation.

The further integration of work across these influential networks will permit the continued and increased systematic use of proven practices to improve patient safety and reduce readmissions, at a national scale in all U.S. hospitals. Through 2019, the new HIINs will commit to and pursue bold new national aims to achieve a 20 percent decrease in overall patient harm and a 12 percent reduction in 30-day hospital readmissions as a population-based measure (readmissions per 1,000 people) from the 2014 baseline, thereby bolstering the impact of both the QIO program and the Partnership for Patients.

The procurement for the HIINs will be a full and open competition, and CMS encourages all interested parties to submit a proposal that will continue to build on the successes achieved so far. Organizations who were a HEN in the first and second rounds of the Partnership for Patients or QIOs and other organizations that meet the RFP criteria are welcome to submit a proposal for the HIIN opportunity, but will compete for selection against all other organizations submitting proposals.

More information about today’s RFP may be found at


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