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 The medical clinic was revoked in 2015 from Medicare enrollment.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

Providing Quality, Affordable Durable Medical Equipment for Beneficiaries

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

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

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

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

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

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

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

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

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

Round One Health Care Innovation Awards Show Some Promising Results

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

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

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

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

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

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

Diabetes Prevention Program

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

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

Health Care Innovation Awards Background

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

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

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

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

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

Medicaid: Keeping Moms Healthy

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

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

Help at the Right Time

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

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

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

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

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

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

Helping Families with Home Visitation

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

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

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

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

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

Acting Administrator Slavitt Speech at Datapalooza

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

So what are we doing about it?

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

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

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

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

  1. Take stock of where you are in history. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Let’s go help everyone do that.

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