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February 17, 2017

Trump's nominee for CMS admin talks Medicaid, value-based care, and more

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President Trump's nominee for CMS administrator Seema Verma on Thursday told Senate Finance Committee members that she does not support proposals to turn Medicare into a voucher program.

During her confirmation hearing, Verma, who is well known for her work with the Indiana state government to reform its Medicaid program, discussed Medicare's transition to value-based care, Medicaid reforms, and more.

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Verma has advised several other Republican-led states on how to incorporate conservative initiatives, such as health savings accounts and employment requirements, into their Medicaid programs.

According to Modern Healthcare, Democrats have been wary of Verma's limited experience with Medicare and recent reports of a conflict of interest regarding her Medicaid consulting work. However, Verma, like several other Cabinet-level nominees, is expected to be confirmed by the full Senate, even without support from Democrats, Modern Healthcare reports.


During Thursday's hearing, Verma said she does not support adopting a "premium support" model for Medicare. Under such a setup, also called a voucher program, Medicare beneficiaries would receive a payment to purchase government-regulated private insurance. The model has been proposed by House Speaker Paul Ryan (R-Wis.) and is reportedly backed by newly confirmed HHS Secretary Tom Price.

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Verma said, "I'm not supportive of" moving Medicare to a premium support model, "but I think it's important we look for ways of making sure the program is sustainable for the future."

Verma also praised the Medicare Access and CHIP Reauthorization Act (MACRA), which she called an "important step forward," but she said implementing the law could present a challenge for small and rural providers. According to Modern Healthcare, Verma said she supported holding rural and small providers accountable for health outcomes, but wanted to protect them from taking on financial risks.

"I support efforts to increase coordination of care and hold providers accountable for outcomes. It's another thing altogether to have them accepting risk," Verma said.

Further, Verma said value-based payment models should be tested in small areas before being expanded, Healthcare Finance reports.

Verma did not directly answer a question about whether Medicare should negotiate drug prices—a move President Trump has supported—saying, "I think we need to do everything we can do to make drugs more affordable for seniors. I'm thankful we have the [pharmacy benefit managers] and Part D program."

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Similarly, when asked about raising the Medicare eligibility age to 67—an idea supported by Price—Verma said, "That's up to Congress; my job is carrying out their will."


Verma also told lawmakers she supports overhauling Medicaid, the AP/Sacramento Bee reports. "The status quo is not acceptable," Verma said. "We can do a better job ... we know we are not delivering great health outcomes."

According to Modern Healthcare, Verma appeared open to Republican proposals to make Medicaid a block grant program or implement per-capita spending caps. Verma said, "I'm endorsing the Medicaid system being changed to make it better for the people relying on it … and whether that's a block grant or per-capita cap, there are many ways we can get there."

Verma praised the Indiana Medicaid reform she helped design, which incorporates on health savings accounts. "What we find is just because individuals are [low-income] doesn't mean they're not capable of making decisions," Verma said.

In addition, Verma said, if confirmed, one of her top priorities would be reassessing a provision included in the Obama administration's Medicaid managed care rule, which requires states to more rigorously review the adequacy of provider networks and encourages states to set quality ratings for plans. Verma said she wanted to quickly determine whether the rule would burden states. "States will spend millions of dollars implementing that particular regulation, and we have to ask ourselves what will we achieve," she said.


When discussing the Affordable Care Act, Verma appeared to question the ACA's essential benefits requirement. She voiced support for giving private insurers more flexibility in terms of what benefits they have to cover. "What works for one person might not work for another person," Verma said. For instance, she said some women might not want maternity coverage.

Verma declined to comment on a proposed CMS regulation issued earlier this week that, among other provisions, made changes to enrollment rules for ACA exchange plans. According to Verma, she had "not been involved in the development of that rule."

Conflicts of interest questions raised

Senators did not spend much time discussing a potential conflict of interest published Tuesday by the Associated Press, but Democrats have cited the reports as a concern. The AP raised potential conflicts of interest regarding Verma's Medicaid consulting work through her firm SVC while also working under contract for Hewlett Packard. According to AP, Hewlett Packard holds a financial stake in the health care policies Verma's consulting work helped shape in Indiana and elsewhere.

Marcus Barlow, a spokesperson for Verma, defended her business practices, saying SVC was "completely transparent in regards to its relationship with HP and that there was never a conflict of interest."

In a letter to HHS, Verma said that if she is approved as CMS administrator she would recuse herself of any conflicts of interest. She said she would sell her consulting firm within 90 days of her confirmation and agreed to divest her stock shares in drug manufacturers and other companies.

Next steps

The Senate Finance Committee is not expected to vote on whether to send Verma's nomination to the full Senate for at least a week. The committee must vote to either:

  • Report the nomination favorably to the full Senate;
  • Report the nomination unfavorably to the full Senate; or
  • Report the nomination without recommendation to the full Senate.

Senate Finance Committee Chair Orrin Hatch (R-Utah) praised Verma, saying, "I look forward to this [nomination] being reported out of this committee, and my goal is for it to all happen very expeditiously."

Sen. Ron Wyden (D-Ore.), the ranking Democrat on the Finance Committee, and Sen. Robert Menendez (D-N.J.) said Verma's responses to written questions for the record will play a key role in whether or not they will support her nomination (Alonso-Zaldivar, AP/Sacramento Bee, 2/16; Dickson, Modern Healthcare, 2/16; Owes, Axios, 2/16; Morse, Healthcare Finance, 2/16; Slodysko/Johnson, AP/Chicago Tribune, 2/14; Friden, MedPage Today, 2/16).

How to navigate the first 100 days of the Trump administration


Since Donald Trump won the presidential election in November, health care reform has since quickly risen to the top of the GOP's policy agenda—and heath care executives are grappling with a new sense of uncertainty.

While many unknowns will remain across the next few months and potentially even years, the first 100 days of the Trump administration will provide significant insight into the direction of reform efforts. Read our briefing to learn what five key issues you should watch.

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