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September 27, 2017

Stakeholders mixed on CMS initiative to redefine its Innovation Center

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While some industry stakeholders are applauding CMS' move to overhaul the Center for Medicare and Medicaid Innovation (CMMI), others have expressed concern about how the Trump administration would use the center's authority.

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CMS last week released an informal proposal outlining potential new payment models along with a broader request for health care providers and other stakeholders to submit comments on how the administration could use CMMI to make it easier for the health care industry to work with Medicare. Stakeholders have until Nov. 20 to submit comments in response to the request.

CMS in the proposal said it is interested in using CMMI to increase physician use of alternative payment models, particularly for independent physician practices. The agency also said the administration wants to reduce reporting burdens on health care providers.

Proposed changes

The informal proposal provided some details on ways the administration could seek to change Medicare via CMMI, but it did not include any formal rules or a timeline of when the changes could be implemented.

For instance, the proposal included details on how the administration could seek to increase so-called private contracting under Medicare through which physicians would be able to contract directly with Medicare beneficiaries to charge the beneficiaries more for care than Medicare typically would allow. While the practice currently is permitted under federal law, about 96 percent of physicians who participate in Medicare do not use the private contacts. Under current law, physicians who use the contracts are prohibited from receiving certain Medicare payments for two years. However, CMS under the proposal could seek to waive those rules and make private contracts more appealing to doctors, STAT News reports.

According to STAT News, CMS also could use its authority to facilitate "balance billing"—a practice through which physicians charge beneficiaries for the difference between what Medicare pays for a service and what a physician charges for the service.

Further, the proposal states that HHS could seek to help MA plans better "compete with traditional Medicare." While CMS included few details on how the administration could seek to increase competition between MA and traditional Medicare plans, STAT News reports the language could signal that the administration might try to encourage more Medicare beneficiaries to enroll in MA plans via a so-called "premium support" model long touted by Republican policymakers.

CMS also said it could seek to test new payment models for prescription drugs. The proposal indicated that the administration could seek to increase the use of value-based purchasing contracts for prescription drugs under Medicare and create programs that would "engage beneficiaries as consumers of their care."

The proposal also stated that the administration could seek to test new payment models for behavioral health care, with a specific focus on care for dementia, mental health, and opioid-related and other substance use disorders.


Some stakeholders expressed concerns that the proposed changes could increase costs for Medicare beneficiaries.

Tim Gronniger, a nonresident fellow at the Brookings Institution and a former CMS official, said, "There have been all of these stories about emergency [department] surprise billing, out-of-network balance billing—none of that's a problem in Medicare." He added, "There's opportunities for really significant new costs for Medicare patients."

David Lipschutz, a senior policy attorney at the Center for Medicare Advocacy, said implementing a premium-support model for Medicare also could increase beneficiaries' costs, while at the same time leaving them with less comprehensive coverage. "The main intent of a lot of premium support programs is to save money," he said, adding, "If you limit the payments to the plans and at the same time, make the rules more flexible for the plans, water down some of the consumer protections, you could be paying, as a beneficiary, more for less. You'd be getting fewer services but paying more money."

Still, some stakeholders praised the administration for seeking their feedback.

Chet Speed, vice president of public policy for the American Medical Group Association, said, "Give credit where credit is due. (The proposal) is a fairly open-ended request for information on improving Medicare delivery models. That's a bit of a change from the past where CMS was relatively prescriptive when requesting comments on Medicare programs and demonstrations."

Likewise, the American Hospital Association (AHA) said it was encouraged by the administration's effort to provide more "flexibility" for the association's members. Joanna Hiatt Kim, VP of payment policy at AHA, said the group "will continue to work with [HHS] Secretary [Tom] Price, [CMS] Administrator [Seema] Verma, and others at HHS to give hospitals the opportunities, flexibility, and predictability they need to improve care coordination and efficiency and deliver better value for their patients and communities."

Jeff Sanford—CFO of Beacon Health, an accountable care organization (ACO) based in Maine that participated in Medicare's Pioneer and Next Generation ACO models—said, "To hear that CMMI is retooling, we're definitely interested in that." Sanford added that he "like[s] the idea of increased flexibility" for providers to apply waivers that currently only apply to Medicare beneficiaries enrolled in an ACO to all beneficiaries. For instance, Sanford expressed interest in expanding waivers that allow ACOs to follow-up with beneficiaries about their care post-discharge (Mershon, STAT News, 9/21; Morse, Healthcare Finance News, 9/22).

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