Focusing on Primary Care for Better Health

By Andy Slavitt, CMS Acting Administrator (@aslavitt) and
Patrick Conway, MD, MSc, CMS Acting Principal Deputy Administrator and Chief Medical Officer

In the United States, we have historically invested far more in treating sickness than we do in maintaining health. The result of this imbalance is not only poorer health, but more money spent in institutions, hospitals, and nursing homes.

The road to a better health care system means correcting this imbalance. We should reinvest in what we value — primary care — as a practice, as a profession, and as an abundant resource for patients. In recent years, we have begun taking a number of meaningful steps to begin this reinvestment process. Today, we are proposing significant actions to improve how we pay primary care physicians, mental health specialists, geriatricians, and other clinicians. By better valuing primary care and care coordination, we help beneficiaries access the services they need to stay well. In addition to keeping people healthy, health care costs are lower when people have a primary care provider and team of doctors and clinicians overseeing and coordinating their care.

There are four parts to our strategy to emphasize primary care:

  1. We are improving how we pay for care that we value. Today, through the Medicare physician fee schedule proposed rule, we are announcing an important set of changes that would improve how Medicare pays for primary care, care coordination, and mental health care. We conservatively estimate that these changes would result in approximately $900 million in additional funding in 2017 to physicians and practitioners providing these services. Over time, if the practitioners qualified to provide these services were to fully provide these services to all eligible beneficiaries, the increase could be as much as $5 billion in additional funding for care coordination and patient-centered care. These changes build on the work we’ve done to improve access to care in Medicaid by finalizing long-anticipatedrules that help support state delivery system reform efforts, and strengthening new policies to align payment with better, more cost-effective care and ensure that access to care is sufficient in key specialties.
  1. We are providing more opportunities for primary care providers to practice the way they think is best. Medicare is transitioning to policies that reduce burden on both patients and clinicians by better rewarding coordinated, quality care. We’ve recently launched a new advanced primary care Medical Home model called CPC+, which will be broadly available across the country and will support primary care doctors’ and clinicians’ efforts to spend more time with patients, serve patients’ needs outside of the office visit, and better coordinate care with specialists.
  1. We are finding ways to reduce practice expenses associated with operating a primary care or other small practice. We have been convening meetings with physician practices across the country to find ways to reduce reporting and compliance burdens, while at the same time increasing support to their practices. This spring, we proposed to streamline how Medicare pays for quality and value through the new Quality Payment Program, which includes features intended to reduce the reporting burden for clinicians. Through this new program, we’ve moved beyond meaningful use to the new Advancing Care Information category, which supports the vision of providers leveraging health IT to promote efficiency and clinical effectiveness based on their unique needs. In addition, the Transforming Clinical Practice Initiative supports more than 140,000 clinicians in sharing, adapting, and further developing their comprehensive quality improvement strategies.
  1. We are exploring and encouraging far-reaching innovations to connect people with primary care in new ways. We have included telemedicine in a number of care models. The Rural Health Council is also helping to promote a strategic focus on access, economics, and innovation issues across rural America.

Today’s Proposals for Primary Care Payments in the Physician Fee Schedule

With today’s primary care payment proposals, Medicare continues to move toward a health care system that encourages teams of doctors to work together and collaborate in order to provide more personalized care for their patients.  Doctors will be compensated for spending more time with their patients, serving their patients’ needs outside of the office visit, and better coordinating care. These changes will deliver improved health outcomes that matter to the patient. Some examples of today’s proposals include:

  • Increasing payments for routine office visits for treating patients with mobility-related disabilities. Currently, Medicare pays approximately $73 for these visits, even though the patient might need to spend more time with the physician or require more physical and staff support during the visit. Under today’s proposal, Medicare would pay approximately $119 for the visit.
  • Increasing payments to geriatricians or family practice physicians – specialists who provide core services for the Medicare program. Under our conservative assumptions, we anticipate that these clinicians could receive a two percent increase in their payments for providing the care we propose to recognize under the Physician Fee Schedule.  Over time, if all of the practitioners that can provide these services provide them to all eligible patients, we estimate that the payment increase could be as much as 30 and 37 percent respectively to these specialties.
  • Proposing to pay for care using the behavioral health Collaborative Care Model. The Collaborative Care model supports mental and behavioral health through a team-based, coordinated approach involving a psychiatric consultant, a behavioral health care manager, and the primary care clinician and which extends beyond the scope of an office visit. Payment for care using this model will help address access issues for behavioral health and improve care for patients. This model, increasingly used by primary care practices, has demonstrated benefits in a variety of settings to improve patient outcomes. CMS is also proposing to pay for other approaches to behavioral health integration.

Strengthening Primary Care Beyond Medicare

As more people age into the Medicare program, we know that access to primary care is an essential tool for their health and wellbeing. We know that effective primary care, care coordination and planning, mental health care, substance use disorder treatment, and care for patients with cognitive and functional impairments can improve outcomes and result in smarter spending. Today’s efforts aim to better value primary care to ensure continued – and strengthened – beneficiary access to these valuable services.

We expect to see the impact of this proposal far beyond Medicare beneficiaries and hope that it will help strengthen the fabric of primary care throughout the country.

For more information, please visit:

CMS Releases Third Year of Open Payments Data

By Shantanu Agrawal, M.D., CMS Deputy Administrator for Program Integrity

On June 30, 2016, the Centers for Medicare & Medicaid Services (CMS) posted the Open Payments data for program year 2015, along with newly submitted and updated 2013 and 2014 records.  Open Payments (sometimes called the “Sunshine Act”) is a national program, required by the Affordable Care Act, that promotes CMS’ commitment to transparency by providing data on the financial relationships between the health care industry – including pharmaceutical and medical companies – and health care providers.

In program year 2015, health care industry manufacturers reported $7.52 billion in payments and ownership and investment interests to physicians and teaching hospitals.  This amount is comprised of 11.90 million total records attributable to 618,931 physicians and 1,116 teaching hospitals.  Payments in the three major reporting categories are:

  • $2.60 billion in general (i.e., non-research related) payments
  • $3.89 billion in research payments
  • $1.03 billion of ownership or investment interests held by physicians or their immediate family members

Over the course of the Open Payments program since 2014, we have published 28.22 million records, accounting for $16.77 billion in payments and ownership and investment interests.

Posting the Open Payments program 2015 year data is exciting not only because we’ve concluded the third reporting cycle for Open Payments, but also because we are now able to compare the data across years to identify trends.  We are also able to analyze payments related to covered drugs, devices, biologicals, and supplies.  For example, we were able to determine that for program year 2015, 2.26 percent (637,131 records) of all financial transactions between physicians and pharmaceutical companies was related to opioid medications.

The Open Payments program provides the public more information about the financial relationships between physicians and teaching hospitals and the health care industry. The Open Payments Program does not identify whether financial relationships are beneficial or may indicate conflicts of interest.  Rather, this transparency program was intended to shed light on the nature and extent of these relationships.

We found that while the totals by major reporting category remained relatively unchanged between 2014 and 2015, there were some shifts in who was paid and how the money was spent.  See Table 1 and Figure 1 below.  Transparency is empowering physicians to be purposeful about their financial relationships with companies, and there is a notable shift towards charitable contributions and away from other interactions such as honoraria and gifts. We also observed some shifts in the highest paid physician types that may be of interest to researchers and other stakeholders. Coming years will provide additional interesting trend information.

Table 1: Highest Paid Physician Types, 2014 and 2015

Open Payment Table

Figure 1: Percent Change of Total Dollar Value by Nature of Payment, 2014 – 2015

The graph below is the percent change of total dollar value by nature of payment, between Open Payment Program years 2014 and 2015. The charitable contribution increased 126.40%. Faculty for a non-accredited education program increased 24.68%. Royalty or license payments increased 13.8%. Food and beverage payments increased 1.18%. Travel and lodging increased 0.87%. Space rental or facility fees decreased 1.78%. Consulting fee payments decreased 1.98%. Grant payments decreased 2.75%. Ownership or investment interest payments decreased 3.71%. Services other than consulting decreased 15.31%. Entertainment payments decreased 20.75%. Faculty for an accredited education program decreased 21.41%. Education payments decreased 28.47%. Gift payments decreased 30.45%. Honoraria payments decreased 49.12%.

Health care industry manufacturers must report to the Open Payments program annually, while participation by physicians and teaching hospitals is voluntary and encouraged.  If physicians or teaching hospitals disagree with what’s been reported, they can initiate a data dispute against the record and work with the reporting entity to resolve the discrepancy before the data is published. This process helps verify the accuracy of the Open Payments data. Registered physicians and teaching hospitals disputed 0.13 percent of Open Payment records (16,653 disputed records) that were eligible for review and dispute, representing 1.95 percent of total value of the published records.  Additionally, 0.22 percent of records (28,955 records) were affirmed by physicians and teaching hospitals, accounting for 0.76 percent of total value of the published records. Registered physicians and teaching hospitals with data attributed to them in the Open Payments system account for 35.45 percent of the total value of their published data. This does not include research-related payments made to non-covered recipients that employed physician principal investigators, which accounted for 40.92 percent of the published payments value.

If disputes are not resolved by the end of the data correction period, those entries are published with a notation identifying them as “disputed.”  We encourage physicians to sign up for Open Payments and to actively monitor any financial data related to them that is being reported.

Open Payments is part of CMS’ ongoing effort to increase transparency and accountability in health care. Since last publication (June 30, 2015), Open Payments has been referenced over 2,600 times in broadcast placements, traditional print, and social media.  Open Payments has been highlighted as a resource for transparency and reporting in an industry with complex stakeholder relationships that traditionally have been difficult to quantify and qualify.

You can search the Open Payments data at: We’re pleased that the public has searched Open Payments data more than 6.78 million times. If you’ve visited the Open Payments website in the past, you’ll notice that we’ve improved our data review tools and provided a number of ways to accommodate different users and their interests:

  • Search Tool: Site visitors can get immediate results using this standard search interface to find detailed information on individual physicians, teaching hospitals, or companies making payments. Search results will now be aggregated in alphabetical order by the company reporting the payment.
  • Data Explorer: You can select a dataset and customize the view using filters, sorts, and other actions to create your own, targeted views of the data along with visualizations, such as charts and graphs.
  • Data downloads: You can download the data in comma-separated values (.csv) format, which allows you to open and explore the data using your own software on your own computer. With this option, you must have robust data viewing software that allows for downloading and viewing data in large datasets.

Open Payments continues to be an important program for health care transparency and we look forward to its on-going contributions to dialogue on the policy and clinical communities. We also invite input on how to continue to improve this program. You can learn more about Open Payments by visiting


Advancing Health Equity for Sexual and Gender Minorities

By: Cara V. James, Ph.D., Director of the Office of Minority Health at the Centers for Medicare & Medicaid Services

Each June we celebrate National Lesbian, Gay, Bisexual, and Transgender (LGBT) Pride Month by increasing awareness of sexual and gender minority populations’ health disparities and advances in promoting health equity for all.

However, despite making progress on a state and national level with inclusive policies, this June we have been reminded that there are still many challenges to overcome. In many places young people are still distanced from their families because of their sexual orientation and gender identity. For many sexual and gender minorities in the U.S. it is still difficult to be out to family, friends, and co-workers. A survey of U.S. adults found that more than 75% of lesbian, gay, or bisexual respondents reported experiencing discrimination in their lifetime. Experiences of discrimination and unfair treatment have been linked to poor health outcomes among older adults who identify as lesbian, gay, bisexual, and transgender (LGBT). These stressors and impacts are amplified when individuals identify with multiple marginalized groups (e.g., sexual, gender, and/or racial minority). That said, studies have shown that LGBT individuals who have good social support have higher self-esteem, a more positive group identity, and more positive mental health.

Although we commonly speak about the LGBT community as a single population it is important to remember that it is actually made up of many diverse individuals from many unique backgrounds and just about as many different ways of identifying themselves. At CMS it is especially important to remember that racial and ethnic minorities, people with disabilities, and older adults may also be sexual and gender minorities.

The CMS Office of Minority Health strives to increase understanding and awareness of disparities, create and share solutions to address those disparities, and implement effective actions to achieve health equity. To that end, we are developing a web-based training to aid providers in the collection of sexual orientation and gender identity (SOGI) data. We are working on a new best practices tool box for providing culturally and linguistically appropriate services (CLAS) with an emphasis on sexual and gender minorities and people with disabilities.

What can you do? Get informed. Learn more about health disparities for sexual minorities age 65 and older in CMS’ June data brief. Find out about the Office for Civil Rights’ rule highlighting your right to be free from discrimination in health careimplementing regulations under on the basis of sex, including sex stereotyping and gender identity. You can also learn more about LGBT health and well-being by looking at the work of our sister agencies within HHS. Think about how you can contribute to bringing health equity to your work. 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!

Better Outcomes for Dually Eligible Older Adults through Integrated Care

By Sean Cavanaugh, CMS Deputy Administrator and Director, Center for Medicare; Tim Engelhardt, Director, Medicare-Medicaid Coordination Office; and Vikki Wachino, CMS Deputy Administrator and Director, Center for Medicaid and CHIP Services

For decades policymakers have hypothesized that better integration of Medicare and Medicaid services could help improve health outcomes for people enrolled in both programs. Since the passage of the Affordable Care Act, the Centers for Medicare & Medicaid Services (CMS) has focused on promoting integrated care and developing new payment and service delivery models for dually eligible beneficiaries. Now the evidence is stronger than ever: integrated care is improving outcomes.

Today, the Department of Health and Human Services (HHS) published a report about the Minnesota Senior Health Options (MSHO) program. CMS and the State of Minnesota started MSHO as a pilot in 1997 to better serve dually eligible beneficiaries age 65 and older. MSHO plans coordinate all the Medicare and Medicaid benefits their members receive, including Medicare coverage of acute medical care and Medicaid coverage of long-term services and supports. Over the years, MSHO has been a platform for delivery system reform within Minnesota.

The new report gives us the clearest view yet into MSHO’s effectiveness. The HHS Assistant Secretary for Planning and Evaluation contracted with RTI International to evaluate MSHO’s outcomes from 2010 to 2012. RTI compared the experiences of similar beneficiaries inside and outside of MSHO and found that MSHO enrollees were:

  • 48 percent less likely to have a hospital stay, and those who were hospitalized had 26 percent fewer stays;
  • 6 percent less likely to have an outpatient emergency department visit, and those who did visit an emergency department had 38 percent fewer visits; and
  • 13 percent more likely to receive home and community-based long term care services.

In 2013, CMS made investments to further strengthen the existing MSHO program through increased alignment of Medicare and Medicaid program administration, federal-state data sharing, and beneficiary materials. CMS is also partnering with 12 other states to implement and evaluate new models of integrated care similar to MSHO through the Financial Alignment Initiative. From 2011 to 2015, the number of dually eligible beneficiaries served in integrated care programs across the country rose from approximately 162,000 to more than 650,000.

Integrated care is improving the lives of some of the most vulnerable Americans. These new findings from Minnesota affirm the promise of integrated care and reinforce the urgency with which we need to continue to develop, test, and scale successful models for better serving dually eligible individuals.

The report can be found at:

Remarks by Andy Slavitt, CMS Acting Administrator before the American Medical Association 2016 Annual Meeting Chicago, IL

Madam Speaker, Mr. President, Mr. Chairman, Members of the Board, Delegates, I’m honored to be invited to address this House and the physicians of America. Hello and good afternoon. Thank you for hosting me at the American Medical Association’s annual meeting. I want to give special thanks to:

  • Doctor Steve Stack, the President of the AMA;
  • Doctor Jim Madara, the CEO of AMA,
  • Doctor Sue Bailey, the Speaker of the House of Delegates;
  • Doctor Steve Permut, the Chairman of the Board,
  • The Delegates and all members of the American Medical Association, and
  • Perhaps most of all, the physicians who serve our beneficiaries and consumers everyday– whether you are in the room today or reading the speech on Twitter.

Thank you for the honor of allowing me to spend this day with you, and thank you also to Rich Deem for the straight talk, honesty, ideas, and conviction you have brought to our relationship.

In speaking to America’s physicians, you represent one of America’s most potent and proudest forces of talent and ability. When anyone across the world is in need of care, there is no one they would rather be cared for then by America’s doctors. I’m here to talk about the historic opportunity we have before us to change how Medicare pays for care, but I’m also here to talk about something bigger: reversing a pattern of regulations and frustration, and ultimately unleashing a new wave of collaboration between the people who spend their lives taking care of us and those of us whose job it is to support that cause.

Today’s discussion continues the conversation Jim and I began publicly last January in San Francisco. At CMS, the conversation has since continued every week with practicing physicians across the country in big practices and small, specialists and primary care, those in new payment models and in traditional ones. We have connected directly now with tens of thousands of physicians and other clinicians in some form and hundreds in more intensive discussions.

It has been a process of giving front line physicians a direct voice to us and of CMS, starting with me and the senior staff, learning how to listen. Most of you became physicians because of the desire to serve and heal people. Since I have been inside CMS, I have seen a similar drive where every day the staff wakes up thinking about the lives of the 140 million Americans, most on fixed or modest incomes, many in the most vulnerable stages of their lives, who depend on you through the Medicare, Medicaid, Children’s Health Insurance, and Marketplace programs.  

Goals for the Quality Payment Program

It is because these patients depend on you, particularly at a time of great need and uncertainty, and often at a time when they need guidance through a complex, fragmented system that I stand here today to say: we can and must take this opportunity to do better. We must:

  • Sharpen our focus on paying for what works;
  • Reduce the time physicians and their offices spend on paperwork;
  • Make health care technology a tool, not an industry; and
  • Do this by carrying forward an open process that reduces the gulf between how policies are made in Washington and front-line patient care

This afternoon, I will tell you about the opportunity with MACRA, discuss our work to create the proposed rule, how we have been listening since then, and I will lay out the critical challenges we need your feedback on.

Let’s begin the discussion of MACRA by looking at what Congress did last April when it passed, and the President signed, the bipartisan Medicare Access and CHIP Reauthorization Act. This ended– permanently– the deeply flawed Sustainable Growth Rate (SGR) formula. This formula had created 17 potentially deep cuts for Medicare physicians over the last 13 years. Thanks to your hard work and advocacy, we now have bipartisan legislation that holds the potential to bring long-term stability and reliability to the Medicare program and to move the system in a direction that works better for patients. It also allows us to end the patchwork of measurement programs created over time and replace them with a new single framework, that while it has several components, can provide the basis for a more flexible, relevant and ultimately simpler to use system.

To be clear, with MACRA, we answered one question and opened up a set of others that are now ours to begin to address. To start with, Congress designed the SGR to control costs in Medicare, so that every American who pays into the system will have the care they need when they need it. Before Medicare, one in three seniors lived in poverty. Today that number is 1 in 10. Without a focused effort at delivering care while controlling costs, Medicare – upon which so many of us depend– risks becoming unaffordable.

As the Medicare program moves into its Golden Years, so does the reality of the job it must do in caring for our nation’s elderly and disabled.

  • There are 10,000 new Medicare beneficiaries every day,
  • A boom generation is turning 70, and
  • The 85 and up generation is set to double over the next 10 years.

With the growth of Medicare beneficiaries outpacing the growth of working Americans, we need to find ways, like we do in other sectors, to deliver better care at lower costs.

Improving Medicare through the Quality Payment Program

Ensuring a stable and reliable Medicare program is a tough task. Through the ACA, we’ve extended the life of the Medicare Trust Fund from 2018 to 2030, which happens to be the year I turn 64. Together, Congress and stakeholders, designed a law that promotes ever-improving care at a reasonable cost. It replaces the blunt instrument of the SGR with a system that preserves the core structure of Medicare. The new program wraps around changes intended to promote coordinated care at reasonable costs through a uniform Merit Based system. This system is defined in the statute to focus on quality, cost, technology, and practice improvement. The system also allows physicians and other clinicians to define and advance new approaches to care for patients like medical homes, specialty models, and team-based models that improve quality, manage costs, and reward physicians in those models with additional bonuses.

The first question, of course, for many physicians is: What do you really need to know about the program? What new sets of requirements are there to participate?

So let me be clear, while it can be an understandable distraction, the goal of the program is to return the focus to patient care, not spend time learning a new program. Medicare will still pay for services as it always has, but every physician and other participating clinicians will have the opportunity to be paid more for better care and for making investments that support patients– like having a staff member follow up with patients at home.

We will, of course, provide information in as much or as little detail as is helpful. For those who like to read computer manuals end-to-end, there is of course the 900 page proposed rule complete with every detail about how the regulation and the law is proposed to work. But, for most people, who do not need to see every scenario and how each element of the formula works, there are webinars, in-person meetings, fact sheets, and web portals that will bring all the information to suit various needs.

There are several immediate features of the program that I want to start out with that are all designed as improvements over today’s payment system.

First, MACRA sunsets three disjointed programs. If you participate in the Physician Quality Reporting System, the Value Modifier, and the Meaningful Use program, your life just got simpler as they are replaced with a single, aligned Quality Payment Program, which will reduce reporting requirements, eliminate duplication, and reduce the number of measures. For those who participate in Alternative Payment Models, those requirements are reduced further or eliminated.

Second, it also reduces the combined possible downward adjustment of 9 percent that is occurring today from the three programs to a maximum of 4 percent in the first year of the Quality Payment Program. The program is designed to build up over the course of several years, with more modest financial impacts in the first year when the vast majority of physicians are expected to be in the MIPS part of the program.

Third, while the Merit-Based Incentive portion of the law is designed to be budget neutral in general, there are new opportunities for additional bonuses. In MIPS, in addition to the 4 percent positive payment adjustment, there is the potential for much higher payments through $500 million in funding over six years. Physicians earn a 5 percent lump sum bonus for participating in an Advanced Alternative Payment Model.

Under the current proposed timing, the first reporting isn’t due until early 2018 for the first performance period in 2017. Off the shelf tools like Certified EHRs and clinical data registries can provide complete capabilities, but other options exist as well, including most types of reporting that a physician is doing today. If CMS can get data automatically or through another source, we will do so.

Implementation Approach and Priorities

With this legislation, we now have the responsibility and opportunity to work together to fill in the details and do our best to avoid unintended consequences that can be so damaging. My first commitment is that we do this in as open, transparent, and iterative way possible.

I’m starting off talking about our process because I am convinced that adding new regulations to an already busy health care system without improving how the pieces fit together just will not work. I’ve always been a believer that good policy — like any plans — only usually get you 10 percent of the way there. It’s how we implement MACRA over the next 10 years that counts. We have adopted a new outside-in approach we label “user-driven policy design.” This approach calls on us to conduct an unprecedented effort of intensive listening and learning.

I will confess this is a new way of working for CMS. I know from my time outside, CMS can appear to be a black box with opaque regulations and limited back and forth about our policy reasoning or our implementation constraints. People won’t always agree with us and that’s okay. We also need to be convincible when we have something wrong or need to re-steer in a different direction as we recently did with Meaningful Use. And this world isn’t filled with perfect answers.

All of this means that policy cannot be written from behind our desks. Our career staff and our regions have been tasked with connecting us closer and closer to where care actually happens. We began this by reaching out and meeting with over 6,300 stakeholders all across the country before we published the proposed rule in April. Our particular focus on meeting with practicing physicians in their offices, in workshops, in focus groups and in weekly sessions to listen to policy options and to dig into the details of how the concepts in MACRA translate into the realities of a busy practice. Since proposing the rule at the end of April, we’ve held over 135 events centered on physicians and clinicians affected by the Quality Payment Program.

While it’s difficult for any organization to open themselves up to criticism, I can tell you that even in difficult conversations, the staff is incredibly energized by getting out from behind their desks and engaging directly with the many of you that care for our beneficiaries.

Most of all, these conversations are grounding our priorities and we are hearing some hard but important truths. Physicians are frustrated. We hear about the overwhelming sense that measures become exercise in compliance, instead of quality improvement; about how technology has often distracted instead of supported patient care; and how an accumulation of many small things imposed from afar add up to feeling that we just don’t get it. This gives us all a place to start thinking about this new Quality Payment Program framework and developing a roadmap that not only improves patient care but does it by beginning to address some of the very real causes of physician burnout. A few examples of what we’ve heard.

  1. One comment summed up the feelings of many, “Let us practice medicine, and not practice documentation and bureaucracy. We don’t have it in us. We are caregivers. Let us do our job.”
  2. A rheumatologist, located in the Mid-Atlantic, said that we needed to, “Figure out how to get doctors noses out of computers and back to patient care.”
  3. A primary care doctor from Arkansas who was looking forward to joining a medical home commented, “There’s so much money in health care, but we need to direct it the right way.”

Through our listening sessions, a number of specific areas have been identified for us to work on that could really improve this program. They include:

  • Providing reports and using quality measures that are more timely and helpful to practice improvement;
  • Providing support specifically for smaller practices, which feel the burden of increased paperwork without the staff to handle it;
  • Allowing physicians more participation in selecting measures and only focusing on what’s relevant to their specialty or practice;
  • Putting more pressure on technology vendors and less burden on physicians, so physicians can do simple things like track referrals when a patient sees another specialist or visits a hospital;
  • Making sure there are sufficient paths to participate in Alternative Payment Models; and
  • Working to reduce the cost of reporting, so the juice is worth the squeeze.

Openly and honestly addressing these challenges and others we hear about give us a path to improving how the Medicare program works for you and will lead to getting better results for our beneficiaries. After listening to many sessions, personally visiting practices and hearing the concerns expressed by many, I have no illusions that frustrations and challenges that have built up over many years will be resolved overnight. While I know many of you support the MACRA legislation and the Quality Payment Program it introduces, I also know that no one likes all the details and new details create uncertainty. The unintended consequences of new laws and regulations, particularly on top of an already over-burdened physician practice, can make as many things worse as they do better. Complexity is not our friend.

We’ll be smart if we look at the Quality Payment Program as a framework we can work with that if implemented with care, can begin the process of turning things around towards a more sensible, simpler approach where physicians and other clinicians will feel supported by laws and regulations, the technology vendors, and the infrastructure that surrounds them. This is why we need to be so committed to a collaborative implementation, increased transparency, and a continual improvement process, so that over the next several years we allow feedback on the ground to inform the policies we implement.

Policy Implementing those Priorities

So let me get into a little of the policy red meat. Rather than go through each element of the program, I want to cover four of the crosscutting themes that have emerged to us through our listening sessions with many of you.

  1. Be patient-centered not only in the focus of the program, but in our approach to everything, so that we can promote the highest quality and most coordinated care for beneficiaries with the least disruption to the physicians and other clinicians who are treating them.
  2. Allow practices the flexibility to drive how they use the program as much as possible so that it supports the unique needs of their patients and allow adjustments as time goes on.
  3. Focus on the unique concerns of small practices– as well as rural practices and practices in underserved areas.
  4. Simplify wherever and whenever possible so that we can reduce the noise from the signal and give physicians time back to spend with patients.

I will spend a minute discussing some of our activity in each of these areas.

Priority #1: Keeping the patient at the center

The law builds on the evidence that care coordination and a focus on quality will improve patient outcomes. Last January, Secretary Burwell committed to moving the majority of Medicare payments to approaches that are linked to quality of care and smarter spending by 2018.

Payment systems are not intended to be finely calibrated models that we expect to be performed to the test. In all my years, I have never met, nor do I hope to meet, a physician who makes her decision on how to treat a patient based on how she gets paid. She does what she thinks is right for the patient and hopes that the system will support her. Physicians, and the patients they treat, deserve approaches that support them for doing the right thing, that encourage physicians to collaborate and reduce waste, and keep people at home and in comfortable settings so their lives continue as normally as possible.

We have been rapidly advancing models that put patients at the center. This includes over 9 million Medicare beneficiaries in Accountable Care Organizations; the recent introduction of largest primary care Medical Home model ever launched; a series of bundled payment initiatives and newer specialty models in Oncology and ESRD. The work in front of us is over time to develop a pipeline of Advanced APM models and work with physicians to generate more.

MIPS is intended to move the focus to patients, as well. There are a menu of more than 90 Clinical Practice Improvement Activities for physicians to choose from which support patient-friendly steps– such as expanding office hours, developing specific care plans, or using evidence-based aids that help support shared decision-making. And if not part of an Advanced Payment Model, the program encourages participation in a clinical registry which provides timely quality improvement feedback. If participating in an APM, no other quality reporting is required. Either way, we need these first steps to help us move away from a compliance program to something truly patient-centered.

It’s also time to ask a lot more of the technology and technology vendors. This is particularly true in the area of what many call interoperability– but which most physicians describe as allowing data to move back and forth between systems so they can follow the movement a the patient after they make a referral. A specialist here 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, and that’s the systems don’t talk to each other. It’s actually the opposite. If 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.”

Along with relief from Meaningful Use, this is the number one ask of many physicians. As in the rest of our lives, the burden needs to be on the technology, not the user. EHR vendors and hospitals that use them will now be required to open their APIs so data can move in and out of an application safely and securely. This will also serve to help eliminate the “desktop lock” that occurred based on early EHR decisions by allowing technology to more easily plug and play. Today’s data silos are more a function of business practices than technology capability and we cannot tolerate it any longer.

Priority #2: Allow Practices to Drive How They Participate

We heard directly from many physicians, and specialists in particular, that a one-size-fits-all program won’t work. In fact, it may not surprise you that many of the physicians who have given us direct input, there are diverse opinions. We’ve heard we should reduce measures and add measures, that there’s too much complexity and not enough options. That’s why we are aiming to build a program that will be as flexible as possible so physicians can focus first, on what’s right for their patients or makes sense in their local community and choose from a number of ways to participate in the Quality Payment Program.

That means more options on choosing appropriate measures. Options on whether to participate in models like ACOs and Medical Homes and the flexibility to move between them without having to report multiple times. It also means using quality measures selected directly from work with specialty societies. We worked with front-line physicians, tech companies, and practice managers over an intensive session and through a Request for Information garner direct feedback on the right measures for each specialty and what could be automated.

For specialists, there are many different avenues to success within the Quality Payment Program. Already, nationally, specialists participate in Medicare ACOs at the same rate as primary care clinicians. And we are working on the development of more specialty-focused models, to go along with the oncology care model launching this year.

Priority #3: Focus on policies based on the needs of small practices or practices in rural or underserved areas.

We must make sure our policies fit with the realities of the local markets where you operate. To be blunt, we all need to acknowledge and work against the reality that many changes in health care today make it more difficult for solo and small practices to stay independent. To level the playing field against these things– more complexity, the fast pace of change, the call for more patient collaboration– we need to focus hard on the areas which increase the costs of operating a practice and look for other things we can do to offset these challenges.

We called direct attention to this by publishing a schedule that demonstrates the negative impact on solo and small practices when they don’t report. Under the Quality Payment Program, we know that physicians in small practices who report their performance can do equivalently well to mid-sized practices. While the results in the schedule we showed pertained to 2014, we expect reporting for small practices to be well above those levels of reporting. However, to be clear, solo and small group practices that don’t report will be negatively impacted.

In our implementation, we are committed to significantly reducing the financial cost and the burden of reporting so that it can be as easy for small physicians to report as for large practices. We are seeking input into how best to do this, but have already taken significant steps such as allowing reporting from multiple sources a physician may already use, increasing the number of items that can be reported through attestation, eliminating duplicate reporting and using data feeds such as claims whenever possible. We are also working with physician user groups to design a simpler portal that is intuitive and easy to use which I will discuss further in a moment.

There are other areas that are of importance to small practices we are focused on, including increased technical assistance, exemptions for small volume practices, and extra credit for participating in medical home models like CPC+, our largest Medical Home model, which was designed based on input from physicians and offers supplemental payments for investments in care coordination. This summer physicians can apply for CPC+ in regions across the country, and we’re mapping out other future opportunities to increase small practice participation in APMs. Small practice burden is an area we are soliciting direct feedback on specifically.

Finally, and perhaps more far reaching, through a network of learning collaboratives that are already on the ground educating physicians — including the associations in the room today — we are moving the Quality Payment Program from policy made in Washington, D.C. to medicine practiced across the country. We look forward to further targeting support to small, rural, and underserved providers through $20 million in funding each year over the next five years. 

Priority #4: Simplifying wherever and wherever possible:

The law gives us a unique opportunity. Over the years, because physician performance programs proliferated as one-off programs, over time, regulations multiplied and the documentation burden increased. Even when CMS made improvements, they were piecemeal and the impacts modest as these programs by their nature couldn’t be coordinated or rationalized. Without a legislative change, we couldn’t address the larger problems.

One of the major opportunities is to use the rule making process to connect these programs together so they can be simplified in a single framework through the new Merit-Based Incentive Program. The good news is that the combined magnitude and reporting effort are far less than they are currently and set a framework for even further simplification over time. However, one reason we are hearing some concern from physicians is that it’s the first time the entirety of these programs can be seen end-to-end in one place.

I will call attention to three simplifications in the proposed rule.

  1. We reduced burden.We have reduced by one-third the number of quality metrics that need to be reported. We aligned the measures across the reporting categories to end repetitive reporting. We got rid of measures in the Advancing Care Information category that hindered usability, and in that category, we moved the focus from “clicking” to care provision and collaboration. Much of Advancing Care Information can be done through attestation, it’s no longer all or nothing and there are a variety of paths that can be selected by a physician practice.
  2. We simplified the process. Physicians may report as a group, and be assessed as a group across each of the performance categories. You pick how you want to report, and you can use it throughout the program. You don’t have to stop and switch because of differing requirements. We use the core quality measures, so that you can use the same measures across payers.
  3. We made it so the programs talked to each other. If you’re in an Alternative Payment Model like an Accountable Care Organization or through CPC+, then your job is half done from day one. You report your quality measures using the same process you have always used for your model, plus you automatically earn credit in the Clinical Practice Improvement Activities for being in an APM. If you see a substantial number of patients through an Advanced APM, then you’re qualified for a 5 percent bonus.

Even as we look to the development of the program over the first few years, we are committed to making the start as smooth as possible. I know there are specific concerns about whether there is sufficient time for physicians to get ready for the new system when the first performance period is due to begin this coming January. We are in active dialogue on this topic and seeking active input on the options. There are, of course, constraints and tradeoffs– reporting is due to be reduced when the program starts, for example, but we are working together and we are communicating openly about those tradeoffs as we solicit comments on the right approach.


We Need Input 

We don’t profess to have all the answers. Right now, as we are talking through the details with physicians, patient groups and other clinicians and stakeholders, we are also in the process of collecting comments. Over the past month, I’ve probably asked people to submit their comments on the proposed rule over 100 times. We’re making this push because there’s no monopoly on some of these approaches and the more input the better. Final comments are due June 27.

All feedback is helpful and we continue to look for comments both on individual policy areas and on crosscutting topics such as:

  1. How to simplify further;
  2. How to align the performance categories;
  3. How to make sure we’re not encouraging “compliance” but rather rewarding care;
  4. How to simplify and provide transparency to the calculations; and
  5. How to encourage and promote participation in APMs and Advanced APMs.

Looking Ahead

Once the Quality Payment Program has been rolled out, I want to make it clear that this constant request for feedback and the need to improve will continue. Things won’t change overnight. The first year of this new program will hit bumps as new policies run into the realities of every day medicine. Systems will need to adapt to your needs. Long-time frustration won’t disappear right away. I’m asking for your ongoing collaboration over the next several years, so that we can implement, receive feedback, iterate, and progress. You may need to think about designing your own feedback report for CMS. Judging from my inbox some days, it’s already started.

We don’t win back hearts and minds with empty promises of quick fixes. We win them back by listening, by making progress even in small steps, and by calling attention to where the system remains dysfunctional. We don’t have the option of running from these challenges because it’s at the very heart of the care we get, that our family gets, that our country gets.

I understand the temptation for this program to become a lightning rod for all that’s wrong with the practice of medicine. I understand it. But I ask you that you not make it the case that until every element is perfect, physicians remain cynical and on the sidelines. I promise you that this process and this program will be better with your input and participation, as you help make sure it connect as closely as possible to supporting the realities of patient care. It is essential that physicians not only participate in but having a leading voice in the change that is ahead.


Seven years ago, President Obama came here to the AMA at the onset of his presidency and challenged us to participate in another change– not to accept the status quo and to move the country forward into an unknown path of health reform. It is thanks to your courage, and the hard work and passion of many of the people in this room, that preexisting conditions are a thing of the past. That preventive and comprehensive benefits are a minimum standard. That science, not insurance company policy, determines coverage guidelines. And that 20 million Americans now have access to coverage and care for their families.

We must do the same thing now. Use every opportunity to commit to the quadruple aim as the key to defining a new future for the health care system. I’ve given you several examples of visits I have had with physicians from across the country and have been sure to share the most critical. But I have also seen what happens when the tide turns and so have many of you.

A physician in New Jersey told me that as part of a Medical Home, he is setting up Skype Villages to connect his elderly patients to each other. Another in Oregon fulfilled her vision of being able to coordinate real-time mental health handoffs as a game changer for her community. A physician in Arkansas told me that, once ready to retire early, they were extending retirement to 70 because how he was getting paid caught up to how we wanted to practice.

When we all– policy makers, physicians, patients, hospitals, and innovators– focus with a unified purpose, we can make this infrequent but significant progress that I believe is ahead of us. We can do it. It’s our responsibility to do it. I look forward to taking on these challenges together. Thank you for your having me today. And thank you for bringing your gifts to heal our country when we need it most. I look forward to our continued work together.

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.

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