AAOS May 29, 2018
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CYMI: CMS Administrator Seema Verma Talks Value-Based Care

On May 7, 2018, Centers for Medicare and Medicaid Services’ (CMS) Administrator Seema Verma delivered a speech that touched on the Department of Health and Human Services’ (HHS) efforts to move to a “value-based” health care payment system, including information on pending Center for Medicare and Medicaid Innovation (CMMI) initiatives and efforts to address drug pricing in Medicare Part B and Medicare Part D. Verma also discussed efforts to reduce regulatory burdens facing providers, including efforts to streamline measures and reduce reporting burdens.

“We recognize that some regulations are necessary to ensure patient safety, quality, and program integrity, but many are redundant, ineffective and have a negative effect on patient care by taking providers away from their primary mission: improving their patient’s health outcomes,” stated Verma. “The agency is busy responding to all of the comments we have received. We’re looking at even the smallest ways to eliminate redundancies and burdens that are taking away from patient care. For example, we’re now allowing notes written by medical students to count for Medicare billing purposes once the teaching physician reviews and signs off. Again, I realize this may sound like a very small step but hopefully one that helps reduce provider burnout.”

Verma also outlined efforts to move to a system that “rewards value and volume,” which include:

  • New CMMI Models: Verma states that CMS will be “putting out a series of new [CMMI] models” this year that incorporate feedback received on CMS’ September 2017 RFI on CMMI. She states that the models will focus on areas including: drug payments; primary care; innovations in Medicare Advantage; allowing providers to compete for patients on the basis of price and quality; and moving the government out of the business of setting prices
  • Promoting Two-Sided Accountable Care Organizations (ACO): Verma notes that CMS will be reviewing the “upside only” ACO tracks and determining whether these tracks may be “encouraging consolidation in the market place, and reducing competition and choice for our beneficiaries.” At the same time, she stated that CMS “applauds the success” of the two-sided tracks and will support provider participation in these models.
  • Stark Law Changes: Verma states that CMS is focused on “removing barriers” that prevent participation in value-based models, and to this end, CMS is “conducting a holistic review of our implementation of this law and the consequences.” She states that CMS ultimately intends to “leave in place the law’s important protections for our beneficiaries—and for the trust fund—while not penalizing providers who are taking brave steps away from fee-for-service.”

Additionally, Verma touched on the recent effort to empower patients and advance price transparency (read more in “ICYMI: CMS Releases Inpatient Payment Proposed Rule,” above).

“In virtually every sector of the economy, you are aware of the cost of services before you purchase them, except for healthcare,” she stated. “Patients deserve, and need to know cost of services, if they are going to be empowered to shop for value. To this end, we are proposing to require that hospitals post their charges online. We know that that won’t fully address patient needs, but we are just getting started and have asked the public for ideas about what additional information patients need to make informed decisions about their care.”

Verma also discussed the issue of drug prices and spending on prescription drugs, noting that treatments and cures are available today that doctors couldn’t have imagined a generation ago, but that spending is on the rise in Medicare and Medicaid, with expensive new therapies putting a strain on state budgets. According to Verma, in 2012, Medicare spent 17% of its total budget, or $109 billion, on prescription drugs. Four years later in 2016, spending had increased to 23%, or $174 billion.

“The status quo simply is unsustainable,” Verma noted.

Finally, Verma highlighted CMS’ efforts to promote a “new era of state flexibility” in the Medicaid program, and noted that CMS plans to approve an additional state waiver “as soon as later today.” She added that waivers will be used to help beneficiaries access behavioral health treatment and increase access to treatment for beneficiaries afflicted by opioid misuse.